S&P Futures Update for July 26, 2012

As stated in y'days Blog post - Tuesday's profile was very stretched out and the odds were that there would be some "backing and filling" which was what happened today as it turned out to be a balanced inside day. What was unusual was that neither the overnite Low or High was tagged in the Pit session. If you look at the daily bar including the Globex session it shows a continuation of the downward trend i.e. 1-timeframing lower. The 1320 remains a key reference to the downside and 1340 to the upside.

We opened near the center of y'days range and settled pretty much at the same level. Value was unchanged. After the initial sell-off which could not take out the overnite Low - the S&P's 1-timeframed higher mainly because of short covering. Today was also a great example of day time frame inventory getting too long in the day timeframe - once price could not take out the early D period High and Overnite High - the short term traders liquidated late in the day. 

Today's Inside Day is a form of "balance within balance". Trading logic calls for "going with" the breakout from Balance. The market remain very short in the near term and I would be very alert for a short covering rally. Durable Goods and Job Claims are due out tomorrow and will most likely influence the early pit session trade.