Here is a 30 minute bar chart showing e-mini day session trading. I thought the market was going to move to new highs today but instead sellers came in just below the last top. The question now is just how far will this drop go.
Since the ES has established a lower top the normal expectation would be that a lower low will follow. The normal target then would be the lower green oval in the 1150-55 zone which lies on the lower line of the descending trend channel I have drawn.
The only fly in the ointment is the fact that trading activity has been quite low this week due to the Passover holiday yesterday and Good Friday (the US markets will be closed this Friday). So there is a one in three chance that the drop from today's high will end at a higher low instead. This higher low would occur near 1161 and the lower boundary of the rising trend channel I have drawn.
In either event I do think a strong rally is about to begin. The initial upside target will be 1185 but I expect to see the ES trade above 1200 in April, probably to 1225.