S&P Morning Update for July 27, 2012

 

O/N Inventory is almost all Long. The immediate references to the downside are y'day High at 1358.75, below that 1357 - previous resistance - now support; and y'day's Settle at 1354.75. Higher Value and price acceptance above 1355-57 targets the high from July 20 (see last night's blog post), a 2 tic gap at 1365.50 and above that the prominent POC at 1371. If we opened now - we would Gap up again - so Gap trading rules apply. If we enter y'day's range and begin to find acceptance - there is a strong likelihood of auctioning down to y'day's low. Y'day's Low was poor.

S&P Futures Update for July 27, 2012

No real change from a Weekly perspective - we are trading within a 4-week Balance. The message from balanced markets is that more information is needed before the market begins its next directional auction. Notice that the Weekly Close for the last 4 weeks are almost the same. Also, as of today July would Close unchanged from June - we are almost centered within the Balance range. Short-term trends, very often, begin from the center of a larger trading range. These trends can also evolve into intermediate-term trends.

  

The S&P's rallied on news from Europe where the ECB promised they would do everything possible to preserve the Euro. This caught many shorts offside and the market gapped up rallied for most of the day. Volume was above average. For upside continuation - I will look for higher value and price acceptance above 1357.

 

Today's profile was fairly balanced. Information that I am carrying forward is:

- Poor High from 7/20 at 1365.50 and

- A very Prominent POC  at 1371.00 from 7/19.

Price acceptance above 1357 and Higher Value targets the two references above. Failure to find acceptance above 1357 and develop higher Value area targets the 7-point Gap below.

S&P Morning Update for July 26, 2012

The S&P's are up based on news out of Europe - the market continues to be headline driven. Yesterday was an Inside Day. As of now we are trading into the Gap above July 23. The Top of the Gap is 1357 - which is resistance. The ideal Short would be a failure to auction higher at the 1357 level. The overnite inventory is balanced however there are still a lot of shorts in this market. If we stay up here - it will pressure the shorts further. On the downside the 1346-47 area is support.  The ideal Long would be a failure to fill the Gap below. Large Gaps such as these are seldom filled the same day.