breakout

Here is a five point box, one box reversal, point and figure chart showing e-mini trading going back to the late August low. I had been expecting a continuation of the drop from the 1224 high in early November down to a prospective 1152 low. But the market's action today has changed my mind. The rally to 1207 so far looks like a genuine breakout from an extensive base that was built after the drop to the 1171 low made on November 16.

My advancing issues oscillators are oversold and the cash S&P kissed its rising 50 day moving average yesterday. Moreover, the market has traded sideways for two weeks in the face of a torrent of bad news from Europe. These facts provide a bullish context which tells me to take the move above the 1200 level as a definite bullish indication.

A count across this base projects a target of 1275.