S&P Futures Update for Oct 28, 2013

Perspective: Except for a pullback in Jun 2013, the S&Ps have been 1-timeframing up for the last 11 months for a YTD return of 25%. Unless the 1-timeframing stops all trends are up. The focus for the coming week is on the FOMC announcement on Wednesday re: policy rates and any hints on timing of the start of reducing quantitative easing. There are important news releases all week which will likely add to the volatility. The daily chart below shows a 5-day balance between 1734.50-1755.75. Balance trading rules apply and be prepared for 3 possible scenarios -

1. Market remains within balance. The longer we stay in balance the more dynamic the breakout.
2. Looks above the balance area and fails; If the market fails on one extreme, the destination trade becomes the opposite extreme.
3. Looks above the Balance area and accelerates - which is a breakout from Balance. A strong breakout is more likely to settle on the upper end of the day's range.

   

Friday's settle at 1754 was near the highs, however the POC did not rise as price auctioned higher. Both Thursday (not yet visited) and Friday's profile show a prominent POC. Odds are that any opening away from the POC will likely be drawn back to that level.Trade the Balance area - see my comments above under the daily chart.

Some information to carry forward:

1. Range Gap at 1728.50

2. Poor Low at 1730.25 on Oct 18.

3. Poor structure all the way down to 1710 area. - (see previous blog post)