S&P Futures Update for Oct 12, 2012

 

The S&P's have made it down to the Balance Low for the second time. Support at this level has weakened as the market makes multiple attempts to get thru it. If the market does break thru - the first reference is the 1418 area - the breakout level above which the S&Ps made new highs. Below that is the lower Balance area high at 1410. Lets look at the profiles - 



As I mentioned in yesterday's post - the market was too short on the close with low odds of downside continuation. The S&P's opened higher as a result of shorts covering in the overnight and the pit session but closed on the lows. The overnight trade made new lows at 1421.25. Value was higher and the POC did not migrate down as the market was selling off - suggesting that the market may still be too short. In addition the selling was not pronounced - it was more "stutter step" in nature - with not a lot of conviction. I view the last two days as balance - we have a poor high and a poor low - odds are high that we test both ends of this balance in the next couple of days.