Here is a point and figure chart showing day session e-mini trading. The box size is one point and this is a 3 point reversal chart.
Yesterday afternoon, after the 1180 low was printed, I thought that this market would continue down to 1175 before it rallied 12-15 points. I also expected a lower low near 1163 later this week.
But shortly afterward the market took off on a strong, 16 point rally and has continued upward today. The fact that by yesterday's close near 1196 the ES had rallied 16 points without even a three point reaction was very bullish (green arrow). In addition, the market closed yesterday above Friday's close and above the last reaction high on the way down to the low (red dash line) - again bullish indications. To these considerations one has to add the fact that the ES closed yesterday well into the range in which heavy selling had occurred Friday. Finally, Monday's 1180 low developed on the lower green dash trend line and also at the point at which the drop from 1210 had slightly exceeded the biggest previous drop on the way up from 1041 (purple rectangle).
All of these considerations entered into my conclusion this morning that the 1180 low ended the drop from 1210 and that the ES had started a move to 1270.
Yes, I know - the market might just pull a U-turn and go right back down again. In such an event I might look a little foolish for buying the ES. But better to look foolish after the fact than to act foolishly before the fact! I am bullish, and can only make money by betting on my bullish views. If the market shows strength when I am basically bullish I have to act accordingly. The worst thing I could do in such a circumstance is to be on the sidelines as the market rallied.
That said I also must acknowledge that the move up from yesterday's low has been fast and only corrected by a six point drop. I think it will approach the 1210 level, perhaps even exceed it slightly, but then will drop 8-10 points before moving higher to new bull market highs.