The Test

Here is a 30 minute bar chart of the e-mini day sessions. I got long early this morning because yesterday's late rally had continued all the way up to 922.50 (not shown on this chart) in electronic trading this morning. So yesterday's supply shock was almost completely retraced. Moreover, volume on yesterday's late rally was high (green lines). While it was not at demand shock levels, the volume told me that the market had decisively rejected yesterday's low at 898 as a fair price.

After I got long I expected the market to move quickly to and above the 930 level. Instead, sellers came back in at almost exactly the same levels as yesterday (red arrows). Once this became apparent I dumped my long position. I wanted to see if the sellers still had enough ammunition to push the market below 900.

Preliminary indications are that that selling this morning was not as strong as yesterday. Volume during the first hour was lower (red lines) , and almost half of that came while the market was rallying. I think that yesterday's close at 908 will be support today. I am revising my range estimate slightly to 910-930. Right now I think that the market will rally into the 940-50 range before it breaks below 905.