Thursday Evening  2 September 2010The last article, mention was made that from balance will come imbalance, S & P - Yin & Yang, [Click on http://bit.ly/aveUGY, first paragraph after first chart].  After six days in a sideways move, at a support area within a larger trading range, the imbalance broke out to the upside, next day, Wednesday, 2nd ar from the end. [Ignore the tiny bar which is the evening session]. 

So many of those who trade futures always want to know what is going to happen next, and which way
to trade?  The answer to the latter is simple:  only trade with the trend in the time frame under
consideration.  As to what is going to happen next, well, let the market make that determination, and
then go with what is known, as long as it is within the first rule of trading: going with the trend.

There is no real trend when price is in a trading range, and we identified the primary resistance and
support areas with labeled horizontal lines.  There are two smaller lines that tell us where to watch for
resistance.  The larger one extends from the mid-July high of 1099.25, and that is the same level where
price failed in mid-August, after the August high.  The smaller horizontal line extends from the initial reaction low after the August high, and that low was 1103.75.

Everyone knows there is a report due out at 7:30 a.m., CST, Friday, and one that may have a significant
impact on the market, or not. That alone precluded taking a position going into a report, and especially
when it is in the middle of a larger trading range.  Remember, our level of knowledge is least in a trading
range, and when price is in the middle, the level of knowledge is at its lowest, price can go either way,
and there is absolutely no edge.  That is where the market has been, this week.

What we are doing is creating a framework for the next primary move.  HOW price reacts/responds to
the identified 1099 - 1103 resistance may provide important clues.  A close above can mean a challenge
of the upper resistance, the 1130 -1135 area. A rejection of that resistance will keep price in the range, and if the downside shows wide bars down, on increased volume, it will tell us the bears are taking
control.  If that happens, the question then becomes, can they keep it?

When there is so much uncertainty, why press the issue?  Where is the edge?  There is none.  Wait for
next week when there is likely to be greater clarity, and the odds of making a successful trade will
increase dramatically.