Thursday, February 04, 2010
Low just ahead
Here is an hourly chart showing day session e-mini trading. I had thought that last Friday's low at 1066.50 would hold. But sellers came into the market in force this morning and pushed the ES below that low.
Now I think that the drop from the January high at 1148 will end near 1058, the point where it would equal the length of the 90 point drop of June-July 2009 (blue rectangle). It is worth noting that the 1062 level is the midpoint of the reaction from 1099 to 1026 in October-November 2009, while 1054 is the midpoint between the May 2008 top at 1442 and the March 2009 low at 666.
So I expect the ES to sink into the green oval later today or tomorrow on the employment number. But I also think that this is the last gasp of the corrective move downward and that a rally to 1200 will soon be underway.