BarroMetrics Views: S&P, An Update 2013-06-20 II

Today, I was going to the review the context of the S&P’s structure; but, Friday’s price action is worthy of a comment.

FIGURE  1 shows the Normalised Volume of the cash S&P. Normally, a strong volume Neutral Day that is preceded by consecutive trend days, usually suggests that the buying activity has been capped. If that were the case here, we should see another strong move in the US session today (Monday). 

However, if we look at a breakdown of the daily volume, as well as the intra-day volume, a different picture emerges.

FIGURE 2 is the Daily. Delta  volume of the E-mini. You see that the thrust down has been accompanied by declining selling control, even though total volume remained constant for Thursday and Friday. This suggests a rally.

FIGURE 3 confirms this - this is a E-mini Delta Volume where the day has been split into five sessions.  We see that after a strong thrust down, the buyers came in. And subsequently, even though the sellers returned to the fray, we see a declining participation.

The way I interpret the info is we’ll see an early rally. If the buyers can secure acceptance above the key reference level at 1620, we could see a retest of the 1650 to 1645 zone.

For my part, I believe that any test, at this stage, of 1620 will fail. Following that failure, we’ll see a resumption of the down move. The minimum target for the first leg down is the 1540 to 1545, with the probable target at 1531 to 1519 zone (basis cash).(FIGURE 4)

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FIGURE  1 Normalised Volume Cash S&P

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FIGURE 2 Daily-Delta  Volume

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FIGURE 3 Intra-Day Delta  Volume

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FIGURE 4 S&P Cash

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