S&P Futures Update for Aug 29, 2012

While the Weekly and Monthly Trend remains UP, the S&Ps continue to balance between 1403 and 1418. Overlapping trading ranges are a sign of an aging trend along with low confidence. The message from balanced markets is that more information is needed before the market begins its next directional auction. There are high expectations of Bernanke's speech from Jackson Hole, WY on Friday.  We have GDP numbers out tomorrow and Chicago PMI on Friday.

Tuesday was balanced rotational day. Looking at the Profiles above we have a 3 day balance with Friday's Upper Distribution being treated as a separate day. An Open away from the prominent POC has high 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. The poor high today is indicative of a market that got too long in the day timeframe. For tomorrow - apply the rules of trading: 

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.

S&P Futures for Aug 28, 2012

All Trends - Weekly, Monthly and Daily are UP. As mentioned in yesterday's blog post - the expectation was higher highs and that is what we got today. However, Volume was extremely light, and the S&Ps showed considerable weakness all day - closing on the lows.

Looking at the profiles - shows Monday as a Balanced day - Value was higher and POC did not migrate lower during the afternoon sell off. We spent most of the time balancing in Friday's upper distribution. 1407 remains a key level - price acceptance below this level puts us back into the lower Balance area and targets Friday's low. Two back to back poor lows lower the odds of further upside continuation. If we do auction higher - there is strong overhead resistance at the 1417-18 level. Heavy news tomorrow and Wednesday - which will likely determine tone of the market.