S&P Futures Update for Aug 10, 2012

No change in Weekly, Monthly or Daily Trend - the trend remains UP - see Daily Bar Chart (including Globex session) above.

We opened right at the center of Y'days range - the closer we are to the center, the higher the odds of a rotational market - which exactly what occurred today. I would treat the last 3 days as a Balance area and apply the Balance trading rules: -

1. Remain within balance;
2. Look outside of balance and fail; If the market fails on one extreme, the destination trade becomes the opposite extreme.
3. Look above or below and accelerate.

Thursday's POC was very prominent. Any Opening away from the POC has good odds of returning back to the POC. The exception is when the market single prints out of range which is usually a sign of high confidence. A breakout to the upside targets the April/May highs. A breakout to the downside targets Monday's low and then the 1384 area.

S&P Morning Update for Aug 9, 2012

Overnight Inventory is Balanced. If we Open now we would open right in the center of y'days range. Taking out y'days low will be the first sign of change relative to the Tue/Wed - Balance. If we take out y'day's low - the next downside reference is 1387.50 and then 1384. On the upside - The 1400 area / Tuesday's high contained the O/N session and is resistance. Taking out the O/N high with conviction keeps the rally and trend alive.

S&P Futures Update for Aug 9, 2012

No change in Weekly or Monthly Up Trend. The S&P's gapped open lower today but did not give up much ground - closing higher than y'day's Settlement price. Traders were caught short off the Open as overnight inventory was a 100% short. The profile above shows a "P" formation - signifying short covering; while the bulls spent most of the day trying to re-take the 1400 level but were unsuccessful. Value was overlapping but lower. For tomorrow - a failure to take out the 1400 level with conviction is negative and may signify that we have reached the 8 month Balance High. On the downside the 1387 may offer minor support while 1384 is major support.  I would treat y'day and today as a 2-day balance and apply the Balance trading rules.