S&P Futures Update for July 16, 2012

Bigger Picture - the S&P's continue to trade within a 7-month Balance Area. July's high of 1375 was made in the Globex session - which is unusual. While last week we made a Lower High and a Lower Low, we essentially closed unchanged from the prior week Settle. Trend remains up and balancing.

As mentioned in last Thursday's post - the S&Ps tend to make a low Thurs/Fri the week before Options expiration and the bias remains to the upside the following week and often into expiration. After 6 straight down days - that market had become too short and Friday saw a swift short covering rally. Thursday's Low of 1319.75 marks a short-term excess low.

Friday was triple distribution trend day. Treat each distribution as a separate day. Friday's rally was on low volume - structure was poor and left a poor high at 1353.25. Opening and building Value within or above Dist 1 is positive and confirms the bias to the upside and targets 1369.50 - also a poor high. Opening below Dist 1 is negative - 1341-43 (single print) area should provide support.

A slew of earnings reports and key news items are due out this week that will determine the tone of the market. On Wednesday, Ben Bernanke speaks on before the House Financial Services Committee to give his semi-annual monetary policy testimony - the market will be listening closely for any hints on further quantitative easing.