What Happened: In spite of positive stimulus developments, U.S. index futures liquidated alongside news of emergency actions in Europe against a new strain of the COVID-19 coronavirus.
What Does It Mean: Friday’s session found responsive buyers at the low-volume node (LVNode) near $3,680.00. Low-volume areas denote directional conviction and ought to resist future auction rotations.
Overnight, the S&P 500 index future auctioned through the aforementioned LVNode — the worst outcome — before responsive buying surfaced near the balance-area low.
What To Expect: In light of the large overnight gap, the following frameworks apply for today’s trade.
In the best case, buyers respond and auction the index above the $3,667.75 high-volume node (HVNode). Holding said reference and trading into Friday’s range would negate much of the selling activity, the most positive outcome.
In the worst case, if the S&P 500 remains below the $3,667.75 HVNode, participants can expect further rotation and balance.
Auctioning below the $3,596.00 excess low would put the rally in question.
Levels Of Interest: The $3,667.75 high-volume node, as well as the excess low at $3,596.00.