S&P Futures Update for Oct 29, 2012

The S&P's are still 1-timeframing up on a monthly basis. There will be no Change in the Monthly Trend until we take 1387.50 which is the Sept Low.



Looking at the Weekly Bar above - we see that price has entered the lower Balance area and found acceptance. The destination trade now becomes the low of that Balance area which is 1387.50 which is also the Sept monthly Low referenced above. Odds are high that we get a nice bounce as price approaches the Balance area low the first time down. 

 

Friday delivered a neutral day. The markets appears quite short. For 4 days we have been trying to get below the 1400 level and have been unable to close below. On Friday, the POC did not migrate lower as price traded lower. In addition, we have a poor high from 10/22 that needs repair. The odds are high that we may see some short covering going into the last week of October. I am treating the last 4 days as Balance and will be looking for where Value develops with respect to Friday's POC. The scenarios for trading Balance are as follows:

1. Market remains within balance;
2. Look outside of balance and fails; If the market fails on one extreme, the destination trade becomes the opposite extreme.
3. Looks above or below the Balance area and accelerates - which is a breakout from Balance.