Breakout

Here is a five point box, one box reversal chart showing 24 hour trading in the e-minis. I think today's action is an upside breakout from a base formed during the past week (last green dash oval). A count across this base yields an upside target of 1140. The significance of this target is that it is above the last high at 1127. This suggests that the market has made a higher low above the early July low and will soon make a higher high above the early August high.

One clue about market direction that can be gleaned from a point and figure chart comes from looking at the relative sizes of congestion areas that form near highs and lows. On the way down from the 1127 high in early August you can see that the congestion areas near highs became smaller (last three red dash ovals) while those near lows became larger (last three green dash ovals). This shows that the buyers were gradually assuming control of the market.

Notice finally that the most recent congestion (green arrow) was bigger than the one which formed at the early August top (red arrow). This is often a definitive indication of an imminent reversal in trend.