S&P Futures Update for Jan 20, 2014

Monday (Jan 13) of last week we saw a liquidation break that auctioned price below a 3 week balance low of 1817.25. Monday's low was 1809.50. Since then the market has retraced the entire range and closed in the upper quartile of a 4 week balance. So far the market has been unable to take out the all time high of 1846.50. Markets, as you all know move from Balance to Trend and back into Balance. Balance usually marks the end of one auction and the beginning of another. The longer term trend remains UP. The question now is - will the market continue trending up or will it begin a new trend down or stay in Balance. Lets look at the Profiles next to see if we can get more insight.



The profiles below show that the short term auction is down. However,

• We have very prominent naked POC from Wednesday, Jan 15 at 1842.25.
• Thursday's profile is fat with a prominent POC that was visited early in the Friday pit session. 
• Friday's Value was not clearly lower, in fact, it was overlapping to almost unchanged. 
• The highs for both, Thursday and Friday are very poor and the POC(s) did not migrate lower as price auctioned down. Back to back poor highs usually increase the odds of repairing those highs in the new week.

So, based on the information from the market profiles, I believe as of Friday, the market may be too short and my bias is to the long side.The overnight session on Sunday will certainly add more color to the above commentary but at this time my scenarios are as follows:

1. Overlapping to higher Value relative to Friday increases the odds of another attempt to take out the all time highs at 1846.50.
2. Overlapping to Lower Value relative to Friday increases the odds of repairing some of Tuesday's structure (1823 area). A break below 1823 increases the odds of  re-testing the 4 week balance low.