S&P Morning Update for July 17, 2012

Bonds almost tagged their June 2012 Highs y'day and have gapped lower today. The Dollar Index is down as well. S&Ps - Overnite the inventory is all Long but the range was contained by 1357 area - also last week's High and a key Reference. If market doesn't care about the O/N inventory and we are to continue to the upside Value should be higher and price should be accepted above 1357. If we were to sell off - the first sign of change would be finding acceptance below 1351 area. The Prominent POC at 1348.75 is a big magnet below. The next downside reference is the O/N Low at 1346.

I would wait for the market to set up before taking a trade this morning given we have a lot of news this morning.

S&P Futures Update for July 17, 2012

After a trend day up on Friday which was largely a result of short covering, the S&Ps have come into Balance. Today - Monday was an inside day and what we call "Balance within Balance" our favorite set up.

Looking at the profiles above - we have a Poor High from Friday. A very prominent POC at 1348.75 - which has good odds of being revisited if we Open away from the POC. The first sign of change will be if we build Lower Value and Price finds acceptance below 1346 area (Support). If we Open within Balance - go with the auction that takes Price away from the POC. If we Gap higher - Gap trading rules apply i.e. "go with" all Gaps that are not filled quickly. Building higher Value and finding acceptance above 1357 (short term Resistance) targets the 1375 area.

Industrial Production news at 9:15 am EST and Ben Bernanke testimony begins tomorrow at 10 am EST - will determine the tone of the market.

S&P Morning Update for July 16, 2012

Overnite we have traded thru all 3 distributions from Friday. Overnite Session is 100% Short - More often than not there is an adjustment to overnite inventory at the Open.  If we trade below the O/N low - price should find support at 1341-43 level - trading below that level marks a change and may bring in additional sellers. We have a Poor High from Friday that may get repaired before the day is over. If we opened now - we would open in Balance relative to the second (middle) distribution. Your best references for the early trade is Friday's High and the 1341-43 level.