Sunday, September 30, 2012

S&P Futures Update for Oct 1, 2012



Perspective: As we begin the 4th quarter of 2012, it is important to keep in mind the longer term trend is still up - we have been 1-timeframing  higher for the last 3 months. 1406.25 is a key reference as that was last high made before we broke out to the upside on a monthly basis. From the June lows of 1248.50, the S&Ps are up almost 15% for the year.



Looking at the Weekly Bar above, we find that the intermediate trend has turned down as we are 1-timeframing lower. Week ending 9/21 was an Inside week. The low of that week was 1443.50 - and is a key reference as that represents a breakout to the downside from Balance.  The next key weekly reference below is 1417.75 - trading below that level and finding acceptance puts us back within the lower 5-week balance.



After 1-timeframing down several sessions, the S&Ps entered the Lower Balance - got rejected as the market got too short - the next auction carried price into the Upper Balance - saw rejection and on Friday delivered an Inside Day i.e. Balance within balance. Price settled a few ticks above the lower balance high of 1433.25. The trading question for Monday is do we stay within Balance or breakout from balance.



The profiles shows a poor high from Thursday - caused by short covering and a poor low on Friday from a market that got too short in the day time frame. If we break to the downside and find acceptance below 1433.25 - the target becomes 1418 area. If we break to the upside and renter the upper balance shown in the daily chart graphic above - the first target would be Thursday's high at 1444.50 and above that 1450 area.

Thursday, September 27, 2012

S&P Futures Update for Sept 28, 2012



After 4 sessions down, the market got too short and what we saw today was a trend day triggered by inventory imbalance. When the driving force is an inventory imbalance the trend day will often be too stretched out or too "thin - Thursday delivered a double distribution day. Remember the intermediate trend is still down. The question now is do we continue higher and find acceptance back above 1443.50 and within the upper balance area or get rejected. So far today we poked inside the upper balance and settled below.



I am going to treat the two distributions today as separate days - and see if we open in or out of balance with the respect to Dist 1.  1450.25 was the last high before the market broke to the downside on Tuesday. If we continue higher - I expect that level to act as resistance. Trading above 1450.25 and finding acceptance - then targets Tuesday's high. On the downside - if we retrace some of Thursday's range - 1433.25 to 1435 should act as support.