S&P Futures Update for Feb 3, 2014

Perspective: So far January is an inside month i.e. we are still 1-timeframing higher on a monthly basis. The weekly trend is down. The daily chart (short term) below shows the market in a 5-day Balance. Coming into today - Friday, the overnight session tested the 1761 area and found buyers. The overnight low of 1761.25 was not tested in the pit session. For next week - Monday, Balance trading scenarios apply:

1. Scenario 1 is that the Market remains within balance - limited opportunity.
2. Looks below 1764 and finds acceptance - first destination becomes the December Low of 1754 made in an overnight session and one I discussed in last week's blog post. Notice that the 1767 level has been tested 3 times already and the market has so far settled above that level. The next test down may not hold. Think of these balance area extremes as a thin membrane - the more you poke it - the greater the odds that you will pierce through that level.
3. The other scenario is that the market having tested 1767 level may now test the other end i.e. 1805-1806 area of the larger balance shown in the chart below. 

 

 The market profiles for the last 5 days do not provide me any additional info. The weekly Value Area Lo/Hi are 1773.25/1787.75. Overlapping to higher Value next week is positive short term. Overlapping to lower Value will be reinforce the current intermediate trend - which is down.