Here is a 30 minute bar chart of e-mini day session trading. A supply shock hit the market this morning (red arrows and red dash oval). The question now is whether or not this shock means that the market is headed back down to 1030 or so.
When I approach a question like this one I always try to interpret the new evidence provided by the market in the context of the longer term situation. I have said before that I think the 1026 low on November 2 was comparable in importance to the July 8 low at 866. As yet I see no evidence that would make me change my mind on this point.
So I am not inclined to interpret this supply shock too bearishly just yet. Instead I think the market is in the process of establishing a new trading area between roughly 1083 and 1100. If so it would only be the first lower area relative to the previous one between 1100 and 1112 (highest dashed rectangle). Most up trends survive one or even two lower trading ranges without reversing.
I am going to lean on the last reaction low on the way up at 1082.50 (horizontal green dash line).
As long as no significant trading activity occurs below that level I will stick with my view that a new step upwards is imminent and will take the e-minis to 1126 and eventually higher than that early next year.