Monday, February 16, 2015

S&P Futures Update for Feb 16, 2015

Every now and then it is beneficial to take a longer term view of where the market has been versus where it is trading currently. The yearly chart shown below provides a great snapshot of a multi-year bull market guided and aided by central bankers. The period shown below is from Feb 2007 to present. Since S&Ps broke above the prior all-time highs made in 2007, we are simply 1-timeframing higher. As of Friday, we have taken out the 2014 highs.

The weekly bar chart below provides an interesting perspective. It shows the ES breaking above a 5-week Balance and taking out the 2014 high. Going into this week, as long as we stay above the 1961-62 area, odds are that we either move higher or continue to balance at these higher prices. The primary catalyst this week is the Eurogroup meeting with Greece and FOMC minutes.


Friday's Value was clearly higher and we closed at the highs. However, there was no elongation in the profile which left a prominent POC at 2089. Thursday's profile has several anomalies which decreases the odds of immediate upside continuation. And finally, Wed's POC at 2061.75 is very prominent and also represents a prior balance high. Any negative headlines out of Europe/Ukraine coupled with the structure shown in the profiles below increases the odds of the market retracing back to the 1961-62 level. My focus on Tuesday will be on developing Value and the Spike from Friday. Opening below the base of the Spike at 2092 is negative and increases the odds of testing Friday's low and the 2 point Gap.  In the event of further liquidation we could easily see the 1961-62 level. On the other hand, positive news out of Europe could propel the market higher despite the structure below. In the event of further upside continuation, there is no hard resistance above other than the psychological 2100 level.