S&P Breakout ?

Here is a 5 minute bar chart of the December S&P e-mini futures. I last commented on this market here.

The problem I face this morning is determining whether the market will make a top near 1381 and then drop to 1364 or so as I am expecting, or whether instead we are seeing a breakout in the market which would then carry to 1390 or so.

The best guide in these circumstances is the size of reactions. The biggest reaction on the way up from yesterday's low at 1364 was 4 points. So my initial guess for the reaction which started from this morning's high at 1380.25 is 4 points, or down to 1376 or so. But the S&P's took only 20 minutes to reach 1376, less time than a normal small reaction which generally takes 30-60 minutes, so I revised my estimate for the initial reaction to 1374 or so, just a tad below yesterday's high print.

From 1374 or so the futures will probably rally to 1381-82 and from there begin a 15-20 point drop. Strength above 1382 will tell me that 1390 lies dead ahead. Weakness below 1374 will tell me that the market is headed for 1364 again.