S&P Futures Update for Oct 28, 2013

Perspective: Except for a pullback in Jun 2013, the S&Ps have been 1-timeframing up for the last 11 months for a YTD return of 25%. Unless the 1-timeframing stops all trends are up. The focus for the coming week is on the FOMC announcement on Wednesday re: policy rates and any hints on timing of the start of reducing quantitative easing. There are important news releases all week which will likely add to the volatility. The daily chart below shows a 5-day balance between 1734.50-1755.75. Balance trading rules apply and be prepared for 3 possible scenarios -

1. Market remains within balance. The longer we stay in balance the more dynamic the breakout.
2. Looks above the balance area and fails; If the market fails on one extreme, the destination trade becomes the opposite extreme.
3. Looks above the Balance area and accelerates - which is a breakout from Balance. A strong breakout is more likely to settle on the upper end of the day's range.

   

Friday's settle at 1754 was near the highs, however the POC did not rise as price auctioned higher. Both Thursday (not yet visited) and Friday's profile show a prominent POC. Odds are that any opening away from the POC will likely be drawn back to that level.Trade the Balance area - see my comments above under the daily chart.

Some information to carry forward:

1. Range Gap at 1728.50

2. Poor Low at 1730.25 on Oct 18.

3. Poor structure all the way down to 1710 area. - (see previous blog post)

S&P Futures Update for Oct 21, 2013

All Trends are UP. We are 1-timeframing UP on a daily, weekly and monthly basis. The S&P made record highs on Friday and took out the earlier leg high at 1726.75 (made in the globex session). This level should offer support on any pullback. The 1700 level is the Balance high below and is a psychological level and will continue to act as an anchor.



 

Lets go directly to the Profiles next. I am treating Friday as a double distribution day and will observe whether we open in or out of balance relative to the upper distribution. The pullback low at 1736.25 separates the two distributions and should act as support the first time down. Any acceptance below this level targets Friday's poor low and below that the range Gap at 1728.50. Some information to carry forward -Thursday's profile was very stretched out with multiple distributions. There is also a prominent POC at 1700.25 that has not been tagged. I am not in any way implying that we will see a pullback on Monday, however given the poor structure below the odds are that we do see some kind of pullback during the week to repair the structure.