Monday, June 21, 2010
Here is a 60 minute bar chart showing 24 hour trading in the September e-minis since the May 25 low at 1032.75.
Last week the market broke above the high (horizontal dash green line) of the 70 point trading area/box that it established following the May 25 low. That was a very bullish development and makes it very likely that a move to 1300 and above is underway. The breakout level should now function as strong support.
On the chart I have drawn four blue rectangles which record the market's upward progression through a series of boxes that are about 18 points in height. The bottom of the current box is near 1112. I expect the drop from today's high at 1129.50 to end near there (lower green oval). The next swing upwards should carry to the 1138-40 level which is the midpoint of a 70 point box whose low is 1103. It is also at the upper boundary of the trend channel I have drawn.
Once that target has been reached a bigger reaction is likely to develop. It will probably carry the market down 30-40 points or so.