S&P

Here is a 15 minute bar chart of regular hours trading in the June S&P e-mini futures.

In my last post I thought the market was on the verge of a breakout above 1321. As you can see the market instead took a dive back below support at 1309 and stopped a little above what I think is secondary support at 1303. The question now is whether or not today's early morning low at 1304.75 will hold.

Right now I think the evidence points to a move down to 1297 or so from the rally high so far of 1313.25. First note that the volume on today's rally has shown a definite tendency to decrease, in contrast to the volume pattern on yesterday's early rally. Second, the volume peaks on down bars during the correction from point aa have steadily grown higher, showing that selling pressure is growing. Third, the rally from dd has so far been smaller that the previous rally from bb to cc. It would equal the size of bb to cc at the 1315.50 level. Finally, the break from bb to cc was faster and deeper than the initial break aa to bb.

All in all, this is a short term bearish picture and leads me to expect a drop to 1297 before we see a rally into the 1325-28 zone and higher.