While the Weekly and Monthly Trend remains UP, the S&Ps continue to balance between 1403 and 1418. Overlapping trading ranges are a sign of an aging trend along with low confidence. The message from balanced markets is that more information is needed before the market begins its next directional auction. There are high expectations of Bernanke's speech from Jackson Hole, WY on Friday. We have GDP numbers out tomorrow and Chicago PMI on Friday.
Tuesday was balanced rotational day. Looking at the Profiles above we have a 3 day balance with Friday's Upper Distribution being treated as a separate day. An Open away from the prominent POC has high odds of returning back to the POC, the exception is when the market single prints out of range which is usually a sign of high confidence. The poor high today is indicative of a market that got too long in the day timeframe. For tomorrow - apply the rules of trading:
- Remain within balance;
- Look outside of balance and fail; If the market fails on one extreme, the destination trade becomes the opposite extreme.
- Look above or below and accelerate.
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