Tuesday, July 31, 2012

S&P Futures Update for Aug 1, 2012



The S&Ps balanced in the prior 2-day range for the most of the day. Late afternoon saw a Spike down. A Spike is a late price probe either to the upside or downside during the market’s two-way auction process. It happens too late in the day to be verified as having been accepted or rejected.
  1. A price opening and trading above a downward spike would be considered positive since the price probe or spike was rejected leaving a buying tail.
  2. Opening within a spike shows price acceptance and keeps the break intact;
  3. Opening and trading below a downward spike reveals that price has not auctioned (probed) low enough to cut off the selling allowing for two-sided trade. The downward auction is not over.
  4. The top of the spike - in this case 1375 area becomes Resistance (previous Support). 
If you merge the 3 profiles above you will find that 1380 is a very prominent merged POC and last week's Close is just above at 1382.50. Most of the auction the last 2 days has occurred below the Weekly Close - possibly implying that traders are mostly Short. Those are key references to the upside. As mentioned before - there is major news out this week - so far it has been fairly positive.

S&P Morning Update for July 31, 2012



Today is the last day of July. Overnight Inventory is Long but there was no follow thru to the upside. My early upside reference is Monday's High at 1387.50 as Resistance and 1375-76 as Support. Any significant change will occur outside of this range. Monday's low was poor. 
As mentioned in last night's Blog Post - treat Friday's upper distribution and Monday's profile as a 2-day balance.

Monday, July 30, 2012

S&P Futures Update for July 31, 2012

 

The S&Ps took a breather after rallying 50+ handles in the last 4 sessions. We opened almost at the center of the Upper Distribution from Friday - which meant opening in Balance and limited opportunities. Value and POC were unchanged. As stated in yesterday's and this morning's Blog Post - the S&P tested 1376 - breakout level and held. Treat Friday's upper distribution and today's profile as a 2-day Balance. The first sign of change will be price acceptance and lower value relative to this 2-day balance. There are still some shorts in this market.

A lot of economic news due out this week. The Federal Open Market Committee will announce a policy decision Wednesday, and the European Central Bank will convene press conference on Aug. 2. All eyes are on the Employment number due out this Friday, Aug 3.