S&P Futures Update for Nov 5, 2012

As we begin November -the market has come into a 2 week Balance. The lows of this 2 week balance which is 1393-94 area has not been visited in the regular pit session. I don't foresee any major change until after the presidential election results are in - at which point I expect a directional auction away from this balance area. 


 

The regular pit session bar below shows a breakout above a 5-day balance at 1416.75 on Thursday and a subsequent failure on Friday as price re-entered the prior balance and closed on lows resulting in an Outside Day. Given Friday was an Outside Day the odds are high that the market continues in the direction of the Close i.e. lower and targets the 1393-94 area and below that 1387 (see weekly bar above)

 

Lets look at the Profiles below - 


My main reference for Monday is the Spike - 

1. Opening within the spike shows price acceptance and keeps the liquidation break intact;
2. Opening and trading below a downward spike reveals that price has not auctioned (probed) low enough to cut off the selling allowing for two-sided trade i.e. the auction is not over.
3. The top of the spike - 1415 area is Resistance.

S&P Futures Update for Nov 2, 2012

As we begin the month of November - it is important to keep the bigger picture in perspective - we are still 1-timeframing up on a monthly basis. October was an Inside Month - implying Balance. Taking out the October Lows will be the first sign of change.

 

Daily Bar above. As mentioned in my Blog post earlier this week - the market appeared to be quite short. We came in this morning with overnight inventory mostly short. And what we saw today was mostly short covering once we got above the 1416.75 level. If the breakout holds our next reference above is the 1431 area.



My reference for Friday is the Spike and Prominent POC. Opening within or above the Spike and trading higher is positive and targets the poor high at 1431. Thursday's POC was very prominent - any opening away from the POC has high odds of returning to it. The breakout level at 1416.75 now becomes Support. Price acceptance below 1416.75 implies a breakout failure and targets Wed's POC and/or Low.