Consolidation

Here is a 60 minute bar chart of day session e-mini trading. I think the past two days' activity is part of a brief consolidation that will be followed by a move to the next upside target at 1054 (green arrow). There is midpoint resistance at that level defined by the 1442 top of May 2008 and the 666 low of March 2009. At 1056 the e-minis will have risen as far above the early August high of 1016 as they dropped below it on the subsequent reaction to 976. You can also see the upper channel line (green dotted line) that intersects the 1054 level during the next day or two.

There is midpoint support at 1023 (dotted purple line). A break off of today's 1038 high as big as yesterday's break would carry the market down to 1024 (purple rectangles). So I think the market will find support near 1023 today or early tomorrow.

There is very strong support at 1016 and I expect that level to hold even if 1023 fails. There is midpoint support at 1015 defined by the September 2008 high at 1291 and the November 2008 low at 739. Of course the 1016 level itself is breakout support.

As you know I expect to see the e-minis trade at 1120 by the end of October.