S&P Futures Update for Oct 17, 2012

 

After breaking out above the Aug 2012 highs - the S&Ps have been balancing for almost 6 weeks. The range is fairly tight - 1415 and 1468. The near term destination becomes the yearly highs of 1468 - doesn't mean it has to reach the destination - however that is what is expected. Also, the longer we stay in balance the more dynamic the break out will be when it occurs.



The S&Ps have now made 4 attempts at breaching the balance low and on each attempt have found buyers at these levels. The Daily (RTH) bar shows a breakout from a 4 day balance. Unless the breakout fails, the expectation is that price will continue to auction upwards towards 1466-68 area. However, the poor structure of the profiles below brings into question the odds of further upside continuation without first doing some repair.

 

For tomorrow - I am going to the use the late day Spike from Tuesday as my early reference. Opening within or above the Spike is positive and keeps the breakout alive. On the downside - I will be observing the 1446 area for support as that was the afternoon pullback Low. While both Value and POC were higher - the shape of the profile suggests that short term traders may have become too Long.