S&P March 2012-03-27 (2)

BarroMetrics Views: S&P March 2012-03-27 (2)

Continuing from yesterday’s blog:

The price action on March 27 did not clarify the situation for me. In my mind, the question is:

  • Have seen the completion of the correction of the 1371 (basis cash) breakout so that the move on March 26 is classified as a new impulse move? Or
  • The up move on March 26 was part of an incomplete correction that will take the S&P back to the 1371zone?

Figure 1 shows the Normalised Volume for yesterday. It would appear from this chart that the buyers are in control. Despite the average volume, we saw a below average range day. But this market is far from easy. Shifting down to the lower timeframe (including Globex), paints a different picture.

Figure 2 is a 30-min chart; the area is the rectangle is the day-session. We see:

  1. The buyers were  unable to hold the zone 1419.75 to 1414.0 (basis June).
  2. In the day session, they were unable mount any creditable threat to this resistance zone. Indeed, until 2:00 PM (CT, the E-mini had a range of only 2.74 points.
  3. In the last hour, the sellers took control and sold off the ESM2 to 1405.00. Figure 3 (30-min Normalised Volume) shows that the highest volume of the day took place in this down move.

So, as Pete Steidlmayer would say. ‘the edge is now with the sellers and they need to do something with their turn at bat’.

If the sellers can create acceptance below the Mar 26 low (1392 basis June), we’ll probably see a test of the zone around 1371 (basis cash, about 1365 basis June). If the buyers reassert control and we see acceptance above 1420, I’d conclude that we should see a continuation of the up move that started on March 26.


FIGURE 1 Normalised Volume S&P

(Chart through the courtesy of Market Volume)


FIGURE 2 30-min ES Continuation


FIGURE 3 30-minute Normalised Volume

(Chart through the courtesy of Market Volume)

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