S&P Futures Update for July 9, 2012

Perspective - Alcoa will kick off the earnings season tomorrow with JP Morgan reporting later in the week. FOMC minutes will be the focus for Wednesday. The recent central bank actions are seen as precautionary moves as the economic data globally continues to be weak - Traders are expecting further monetary easing from Central Banks around the world. 

On a monthly basis we continue to trade within a 7-month balance. On weekly basis - we are 1-timeframing up for the last 4 weeks. 1375 represents the Globex High made over the July 4 holiday. Swing Highs made in the Globex session have good odds of being revisited - it does not have to be tomorrow or this week. Lets look at the Daily Chart and Profiles :-

 

Coming into Friday's Pit Session the overnite inventory was short. The S&P's gapped lower - i.e. the market got further short in Friday's pit session on the heels of week employment data - however, we closed on the Highs - most likely a result of late day short covering. Volume was light given the holiday week. Notice that we barely traded (2 tics) into the large Gap below - a sign of short term traders in play. Large Gaps such as these can take several attempts before they are filled. Below us we have a smaller balance area between 1331-1300.






Settling between the 2 Gaps offers a difficult trade location. The trading question for Monday is do we open in or out of Balance relative to Friday's range and will we attempt to fill the Gap above or below us. 1357 serves as key Resistance - taking this reference out targets the 2 day balance highs above. 1330-32 area serves as support - which is also the top of the smaller balance area below.