Wave Chart at 11 am

Here is the wave chart for the e-minis over the past two days.

Speculation is all about anticipation - anticipation of changes in market trends and in public psychology.

The e-minis have been dropping steadily from last Wednesday's high at 876. The wave down which ended near this morning's open was larger than the previous two down waves, showing the bears in control of the market. The subsequent rally this morning ended below resistance near 823 and the market has backed off about 7 points from the rally high. None of these observations suggest that the drop from 876 has ended.

Yet there are some straws in the wind. The four highest volume, five minute bars Friday were up bars which occurred on the rally from the late day low at 817.50 (two of these bars I have deleted from the chart to make it easier to see the volume pattern). In fact the last half hour of trading Friday showed the highest upside volume of any 30 minute bar during the last two weeks with one exception which itself was an up bar. Today's two highest volume 5 minute bars (aside from the opening bar) were also up bars. Finally, the last down wave on the chart has so far been the shortest one visible and has lasted about an hour now, just about normal for a corrective wave.

All in all I think this market is trying to change its trend to up from down. A move above 827 now would confirm that indeed the drop from 876 has ended.