Thursday, August 30, 2012

S&P Futures Update for Aug 31, 2012



As August comes to a Close, the S&Ps Monthly bar shows a breakout failure above 1413.25 (a 7-month high made in Mar 2012) as the market settled back within an 8 Month balance. The destination trade now becomes the 8-month balance low of 1247.50 made in Jan, 2012 - unless we make another attempt at the recent highs.



The Weekly Bar above shows a tight 3-week Balance. If we continue to auction lower, the first sign of change will be price acceptance below 1394.25 (low of week ending 8/17) which then targets 1387.25 below. This will also signal a change in the intermediate term trend as we will stop 1-timeframing UP on a weekly basis.



The profiles shows conflicting information:
- we gapped lower today - negative
- lower Value and POC  - negative
- Unable to take out last week's low - postive. Today's sell off was on low Volume and felt more like short term traders liquidating ahead of the Fed announcement from Jackson Hole, WY.
- Anomalies from Wed including a prominent POC from both today and Wed - lower the odds of downside continuation - positive
- Poor high - while Value was lower - attempted direction was UP.

I would treat today as a balanced day and observe where we open relative to the POC - in or out of balance and to what degree? Also - see comments under the Weekly Bar.

Wednesday, August 29, 2012

S&P Futures Update for Aug 30, 2012

 
 
 
Wednesday was another balanced rotational day. Looking at the Profiles above we now have a 4 day balance with Friday's Upper Distribution being treated as a separate day. Tuesday's poor high was repaired late today. The merged POC for the 4-day balance is at 1409. Any breakout from this range targets 1400 at the low and 1418 at the high. For tomorrow - apply the rules of trading: 
  1. Remain within balance;
  2. Look outside of balance and fail; If the market fails on one extreme, the destination trade becomes the opposite extreme.
  3. Look above or below and accelerate.