Saturday, August 31, 2013

S&P Futures Update for Sept 2, 2013

Perspective - As we come to a close of August, the S&Ps are still 1-timeframing UP on a monthly basis. Monday marks the 1st trading day of September - the main question is will we take out the August Low of 1624.75 and stop the 1-timeframing. It will be important as a change in the monthly trend can morph into the long term trend turning lower.

 

The weekly Trend is down as we made lower lows for a 3rd week in a row. Last week also delivered an Outside Week. Friday's close at 1631.25 was 1 tick below the prior week low of 1631.50. Too close to call but falls into the definition of an Outside Week which suggests further continuation down. Lets look at the Daily Chart below - which shows that as of Friday the market came into a 4 day Balance. Going into Monday, the market can 1) stay within Balance i.e. not really test the extremes 2) fail after a test of the Balance High or Low or  3) accelerate after breaching the Balance high/low.  If we do continue lower - the next reference is the 1620 area - top of a prior balance. Acceptance back into this lower Balance targets the 1600 level. Continuation higher targets the poor High from Thursday and the Gap above between 1644.75 - 1653.25.

 

Friday's Close at 1631.25 was almost perfectly centered within the 4 day Balance. Friday's POC is also very prominent. Any opening away from the prominent POC has high odds of returning to that level. Often a directional auction begins from the center of Balance and/or a prominent POC. Balance trading rules apply. See comments above on Daily Bar.