Wednesday, July 07, 2010
First leg up
Here is a five point box, one box reversal chart of 24 hour e-mini trading going back to mid-May.
As you can see the market established an extensive sideways range during the past week right at the bottom of a trend channel. A count across this range projects to 1095. A rally as big as the last rally (97 points) would carry the market to 1100 (blue rectangles). This 1095-1100 target area (green oval) will probably be at the upper channel line by the time it is reached.
I think the market has embarked on the first rally in a new bull market up leg. The previous one lasted 13 months and carried 550 points. A rally that carries upward 8 months and 340 points from the recent low would end in April of 2011 at the 1340 level. Another 13 month, 550 point rally would end in August 2011 at the 1550 level.