Update

Here is a 30 minute bar chart of e-mini day session trading. This morning I thought the market would break out to new highs by a wide margin as a follow through to what I thought was an impressive show of strength yesterday. Instead sellers came in right away. By the time the market dropped 10 points below its open I figured that the high of the day was in and I sold the unit I had added earlier today. I am still long one unit because I think this market will break out to the upside from this trading range.

Today we have put in a day session range nearly as big as yesterday's. At the 1020.75 level these two ranges would be equal (purple rectangles). The 1020 level itself was the low of the trading range prior to yesterday's terminal shakeout (red dash line). Moreover, the rising trend line which connects the 976 low with yesterday's low currently stands at 1022. These three considerations make me think that 1022.00 is either the day's low or is very close to it.

Volume on this morning's break was lower than yesterday's at the same time. And yesterday's was in turn lower or equal to volume seen on several early breaks during the past couple of weeks. So I don't think that we have seen any sort of supply shock.

I conclude that today's action is just part of a normal trading range which should be resolved by an upside breakout. If the market should show a preference for trading below 1017 I would change my mind about this and instead expect a drop to 1000 or so before any substantial rally starts. But failing this negative development I remain bullish looking into next week.