Here is an hourly chart of the March S&P e-mini futures which are trading about 11 points higher than the cash index. I last commented on this market here.
The low last Friday at 1419.75 was the low of a wide range down bar. There was no follow through selling so I think the buyers near the low of this down bar were longer time frame buyers. The fact that bids from this group came in above the 1416-18 support zone increases my confidence that the market will make an important low point at 1416 or perhaps a point or two lower.
The rally today will probably stop in the 1430-31 zone. This is the price area where longer time frame traders last sold agressively. You can see this from the green, wide range bar which was Friday's opening bar. This bar indicated longer time frame buying but there was no follow through buying. So the sellers near the high of this bar (1430) were longer time frame traders too.
After the market reaches the 1430-31 zone I think it will drop to 1416 or a tad lower. This low should then be followed by a rally to 1455 and higher.
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