Morning update

Here is an hourly chart showing day session e-mini trading. A supply shock hit the market after yesterday's Fed news and it strengthened this morning after the pit open. Such shocks can be identified by their unusually high volume and uncorrected price movement (red oval and arrows). In this context I think this supply shock is telling us that the corrective move which started yesterday will probably last four or five trading sessions (by my count today is the first day of the correction). So I expect a low sometime around the middle of next week.

The 1035 level still looks like pretty good support. It is the level of the last significant high on the way up and coincides with the lower green dash channel line. If the market should break through that support my plan B support is at 1015, the midpoint between the 1291 high in September 2008 and the 739 low in November of 2008. In either case I expect the next up swing to carry the market to 1120 or so by the end of October.