Here is a 60 minute bar chart showing day session e-mini trading. I still think this market has a shot at the 1020 level (blue oval). But I also see a very substantial, potential base developing (lower blue dash rectangle). Notice that the average range of the bars making up this base is visibly larger than the average range of the bars making up the recent top (higher dash blue rectangle). This difference in activity shows up even more dramatically on my point and figure charts. It means that any rally from current levels will start from support strong enough to push the market at least to my 1120 target and probably even higher than that. And it also means that the market is preparing for a good rally from current levels, even if this rally should end at a lower top instead.
My line in the sand remains at the 1008 level, the point at which the drop from 1099 would equal the length of the June-July reaction. Any weakness below 1008 would make me conclude that the market would be on its way to 960.
In the meantime I am watching the resistance levels at the two recent small tops (horizontal green dash lines). A move above either one of these, on good volume, would be a very bullish indication and mean that the base building is complete.