S&P Futures Update for May 5, 2014

I had written in my last post that staying above the 1839-1840 area would increase the odds of another attempt at the all time highs at 1892.50. Last week's low was 1844 and Friday the market came within 6 handles of the all time high. April closed at 1878 which was a tick above the March regular trading session high of 1877.75 so technically April qualifies as an outside month. However, the monthly bar also indicates a market in balance. Friday's overnight high at 1886 and the all time high at 1892.50 are still not tagged/tested and keep in mind that the all-time highs for all other markets i.e. Russell, Dow and the Nasdaq were also made in the overnight session. It is very rare for lasting leg highs to be made in overnight trading. This makes me very cautious to have a bearish bias in this market.

 

The weekly chart below shows a market in Balance - No change in the weekly picture except that the market has made multiple attempts to break above the 1880 area. Think of it as a membrane that is continually being poked, eventually it will give way. However, another failure at these levels turns our attention back to the 1839-1840 level.

 

Looking at the Profiles below, I see a 2 session balance with matching Value Areas. The first sign of change will be price acceptance outside the shaded area. A break below targets the poor lows at 1865-66 area and below that the 1840 area. A break above targets targets the overnight high coming into the Friday pit session at 1886 and above that the leg high at 1892.50. The overnight session going into Monday may reveal the market's attempted direction.