Reaction Nearly Over

Here is a thirty minute bar chart of the past week's e-mini day sessions. This morning's initial bar now looks like a buying climax. One reason I didn't buy the subsequent 10 point reaction near 721 was that I was expecting a strong opening 90 minutes. When we got only 30 minute up, all on a wide range, high volume 30 minute bar, and then the market proceeded to trade sideways for an hour, I began to suspect a volume climax that would indicate more than a 10 point reaction ahead.

A reaction of more than 10 points would probably amount to as much as the previous big reaction on the way up from 665. This you see outlined in the first purple rectangle and it ran about 23 point down. A similar sized reaction (second purple rectangle) from this morning's high would end near 709, a level that is a little below midpoint support based on mid day trading yesterday - the 711 level.

So far the e-minis have dropped to 713 and then rallied to 720. I expect to be a buyer on a new low for this reaction. Meantime I am looking for any sign that the 713 low actually ended the drop. If I see one I will get long too.

Once the reaction is complete I shall be looking for a rally of about 30 points, the same length as the initial rally off of the 665 low (blue rectangles).