headed up

Here is an hourly bar chart showing 24 hour trading in the e-minis for the past month. Early in November the market attempted to break out above the April top at 1216.75 (green horizontal dash line). It did not succeed and a 50 point break ensued.

Now the ES is making another breakout attempt. This time things look more encouraging. After a two day hesitation and a bearish employment number last Friday the market has rallied further to 1235 this morning. A drop from this morning's high that equals the biggest since the November 29 low would only carry the market down to the breakout level (blue rectangles). That breakout level is now support, a fact emphasized by the fact that the lower trend channel line is now roughly at the 1211 level and is rising.

I think a drop back to support is likely (green oval). But it should only last a day or two and it should be followed by a rally to the next resistance level at 1250. This is resistance because the March 2008 low on the Bear Stearns failure was 1253.

This is a bull market. I think the S&P will reach 1300 by April.