Wave Chart at 2pm

Here is the wave chart of the e-minis. As I suspected this morning the drop after the housing number news was weak selling. Since then the market has begun to show modest bullish indications.

First of all it held initial support at the lower dotted line. Then it put in a weak up wave which showed modest signs of increasing volume and which carried above my 862 resistance point. The subsequent down wave occurred on low volume and was smaller than the down wave which preceded it. Finally the next up wave was bigger than the preceding up wave and volume also increased during that rally.

The acid test of the bullish interpretation comes on this down wave. It should make a higher low at the higher dotted line, midpoint suppport based on the last down wave.

The market is becoming balanced after a seven week drop. Increasing volume on a move above 780 would be very bullish.