Midpoint support and resistance

Here is a 60 minute bar chart showing day session e-mini trading during the rally from the 865 low point. I think the market's action over the next few days will be contained by two midpoint levels that I have drawn on this chart. The higher one (red dash line) is the midpoint between the 666 low and the September 2008 rally top of 1291 and it stands at the 979 level. The lower one (green dash line) is the midpoint between the October 2008 high of 1067 and the November 2008 low of 739. It stands at 952.

My best guess is that the initial break will carry the market down 10-15 points - the biggest drop on the way up has been 15 points (twice). Another rally to slightly higher highs should then develop and be followed by a bigger break - maybe 25 points or so.

I have drawn a trend line from the 865 low - a so called 2/3 speed line - it intersects the 940 level today, 2/3 of the way up from 865 to 976. Such trend lines are often useful when the market has an uncorrected advance as it has had recently. In any event, I note that a 25 point break from 979 would carry the e-minis down to that trend line on Monday or Tuesday.

After this sideways action I expect the e-minis to begin a move that will take them over the 1000 level.