12-12-2011

Composite: Still within balancing area for past seven sessions. Mini composite looks "P" shaped which is indicative of short covering which makes the market structure potentially weak.
15 min: Areas to do business marked on chart. As of now (6:15) the overnight session rocketed higher, but has tapped on the 1279.50 CLVN and started to drift down. However, if we break out of this level, I will go in the direction of the breakout. Otherwise, I expect continuation of trading within balance zone.
5 min: Key HVN/LVN's marked.

AM Thoughts: Overnight condition to the buy side. Hit CLVN at 1279.50 and reversed. Expecting to open above or near the top of the 7-day balance area. Balance zone ranges from 1257.75-1274.50. Expect opening type of ORR or OAOR.

Hypothesis: Overnight profile is "P" shaped as well so we may get a liquidation breakdown on the open or we could gap higher and continue to run for a trend day. If we open near the top of the balance area or outside of it, probabilities favor a breakout of the balance area to the upside.

Plan: Today the plan will be to either follow the breakout or fade the edges doing business only at specified areas.