Wednesday, August 25, 2010
Here is a daily chart of the e-mini futures. I thought you classical bar chartists out there would be interested in this.
Amidst spasms of pessimism the market has reached an oversold condition at the point labeled "RS" on this chart. This could well be the right shoulder of a classic inverse head and shoulders formation. I haven't noticed anyone commenting on this on the web, so I think it stands a good chance of developing an upside breakout of the neckline (horizontal green dash line). If it does the upside potential would be measured by the size of the rally from the head to the neckline, about 125 points, added to the neckline level itself. This works out to be the 1250 level.