Tag: Gap

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Commentary

Market Commentary For 12/1/2020

What Happened: Alongside optimism surrounding a coronavirus vaccine and the economic recovery, stock index futures are trading out of range and balance, improving the prospects for further upside.

What Does It Mean: In Monday’s regular trading, responsive buying surfaced after the repair of poor structures left behind the November 24 upside discovery process.

Simply put, the S&P 500 established a v-shaped recovery — 100% retracement of the November 30 session high — after a test of the high-volume node near $3,600 offered responsive participants a favorable buying opportunity.

Overnight, buyers further extended range, breaking a week-long balance area.

Given the bullish break above the responsive selling ledge at $3,640, participants now know that initiative buyers are firmly in control, and the primary target remains the $3,668.75 all-time rally high.

Due to the gap’s size, the odds of range expansion during the day session are lower. As a result, participants should monitor whether the resistive $3,640 ledge now turns into support. Breaking below that level puts the rally on hold, and suggests further balance.

Levels Of Interest: $3,640 ledge, $3,664.75 overnight high, $3,668.75 all-time rally high.

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Commentary

Market Commentary For 11/24/2020

What Happened: Alongside preparations to nominate former Fed chair Janet Yellen for Treasury secretary, as well as hopes for an economic recovery on COVID-19 coronavirus vaccines, U.S. index futures added to Monday’s v-shape recovery.

What Does It Mean: After a failure to accept Friday’s late-day spike, participants established an excess-low near the micro-composite high-volume node, the fairest price to do business in prior trade. Since then, initiative buyers broke the three-day balance-area high and drove through the low-volume node at $3,580. The subsequent activity found acceptance in the 11/18 profile, suggesting a change in near-term directional conviction.

As a result, participants come into Tuesday’s day session knowing that the market has made a substantial advance, gapping up to the $3,610 high-volume concentration which denotes value and supply.

Higher prices should allow responsive sellers a favorable opportunity to sell and initiative buyers a favorable area to take profit. An initiative drive through this area would be the most bullish outcome, and would target first the $3,630 balance-area high, and then the November rally high.

Levels Of Interest: $3,580 low-volume node, $3,610 high-volume node, $3,630 balance-area high, $3,668.75 rally high.

Bonus Graphics: There is more than meets the eye.

Graphic by Goldman Sachs, from The Market Ear; sentiment stretched, risk is moderate.
Graphic by CNN, from The Market Ear; “Markets do not crash on fear.”
Ready for the Santa rally - but first some Thanksgiving
Graphic by Goldman Sachs, from The Market Ear; bears have seasonality to fight.
Graphic by Deutsche Bank, from The Market Ear; “soon we have no shorts left.”
Graphic by Spotgamma, from The Market Ear; SPX $3,600 to be sticky.
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Commentary

Market Commentary For 11/23/2020

What Happened: Alongside hopes for an economic recovery on COVID-19 coronavirus vaccines, U.S. index futures negated Friday’s late-day spike liquidation, gapping higher into Monday’s open.

What Does It Mean: On Friday’s end-of-day sell-off away from value, the S&P 500 closed within a prior balance area marked by the $3,580 low-volume node and $3,506.25 excess low (see below graphic). Since then, the weekend session negated the spike liquidation, suggesting initiative sellers may be losing control.

As a result, if participants can auction and spend time above the $3,580 low-volume node, then the potential exists for a failed breakdown and range-expansion up to the balance-area high near $3,630. Otherwise, if participants manage to retake the prior selling activity marked by the $3,562 spike base, then that action may be the start of a new trend to the downside, confirmed by range expansion beyond the $3,506.25 excess low.

Pictured: Profile overlay on a candlestick chart of the Micro E-mini S&P 500 Futures

Levels Of Interest: Spike base at $3,562, the $3,506.25 excess low, as well as the $3,580 low-volume node.

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Commentary

Market Commentary For 11/16/2020

What Happened: On stretched sentiment, U.S. index futures extended their gains on news that a vaccine developed by Moderna Inc (NASDAQ: MRNA) was 94.5% effective at preventing cases of the COVID-19 coronavirus. The response resulted in a confirmation of Friday’s upside balance-break.

What Does It Mean: As of now, the market remains initiative above the $3,580 balance-area high.

Further, the successful negation of last Monday’s end-of-day spike points the confirmation of a higher time frame breakout, and keeps initiative buyers in control. Trade back to last week’s balance-area, and below the $3,506.25 excess low, would question the success of this higher time frame breakout.

Moreover, given the large overnight range expansion and the likelihood of a gap open outside of prior-range and -value, there’s the potential for responsive selling and balance.

As a result, participants should monitor whether initiative participants can overcome the responsive selling. If successful, then participants should place trades in the direction of new activity.

Levels Of Interest: 100% projection of the balance-area at $3,650, the $3,580 balance-area high, the high-volume areas at $3,600, $3,540, and $3,500, as well as the low-volume areas at $3,520, $3,575, and $3,608.

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Commentary

Market Commentary For 11/11/2020

What Happened: Following Tuesday’s resolve of excessive coronavirus vaccine optimism, responsive buyers established an excess low at the $3,500 high-volume ledge, and auctioned the S&P 500 up into Monday’s end-of-day spike liquidation.

What Does It Mean: Participants were able to repair some of the poor low-volume structures left in the wake of Monday’s coronavirus vaccine news. As mentioned earlier, responsive buyers resurfaced at a notable high-volume ledge, the site of recent value.

Further, the possibility of a failed higher time-frame breakout is intact. As a result, participants should look to whether Monday’s late-day spike is negated via trade above $3,580 in the S&P 500. Failure to negate the spike suggests initiative sellers remain in control.

Levels Of Interest: $3,580 spike, the high-volume areas at $3,600, and $3,540, as well as the low volume areas at $3,520, $3,575, and $3,608.