Wednesday, March 03, 2010
Here is an hourly chart showing day session e-mini trading. The market is progressing through a stack of 36 point boxes (blue rectangles). It has moved into the third box and the bottom of this box near 1113 should now serve as support.
The upper green trend channel line meets the top of the third box around March 10 in the 1145-50 zone (green oval). The January 11 top was at 1148 (horizontal red dash line). I think a reaction of 20 points or so is likely to materialize then, but that any such break will be only a brief interruption of a move to 1200 that I see developing.
I have noticed a lot of commentary that cites the low volume, low activity in this phase of the upswing as a reason why the ES should soon reverse and head much lower. But as you can see on the chart above the market is creeping higher, showing a very regular sequence of higher lows and higher highs. Moreover, the advancing issues number that I follow (see my chart page ) are very strong. In this context I interpret the low volume as a sign that longer time frame sellers are not finding current prices very attractive. Volume will only increase noticeably when these sellers come to market and this will require higher prices than we have seen thus far.