S&P Futures Update for July 23, 2012

The S&Ps continue to trade within a 7-month Balance. So far July is unchanged from June's Close.

The Weekly Bar shows that the S&P's are Up and Balancing - a 3-week Balance range between 1320 and 1376. Any significant change will occur outside of this range.

1374-75 is a key level - as that represents the point where the 150+ point correction started back in May. We looked above that level on Thursday and failed. Friday - we gapped lower - failed to fill the Gap by 2 tics and traded lower for the remainder of the day. Thursday's high most likely marks a short term excess followed by a Gap lower - signalling an end of one auction and a beginning of another.

Friday was a low confidence day. There is conflicting information when we look at the Profiles.

- A very Prominent POC at 1371 on Thursady - positive

- Poor High on Friday - postive

- Anomaly at 1360 level - last upside breakout level - positive. Anomalies represent forcing action and are often visited in the next day or two.

- Poor Low on Friday - negative

- Possible excess at 1376 - negative

- 2-tic Gap above Friday's high - negative

 

For Monday - the trading question is do we open in or out of balance relative to Friday's balance. If we continue to trade to the downside - the first key reference is the 1357 and then 1353 - Wed's low.  Taking out 1353 with conviction confirms the Excess High and change in short-term trend. Failure to take out Friday's low targets the 2-tic Gap above and the prominent POC at 1371. The third scenario could be that the market comes into balance and trades between 1371 and 1357.