Friday, June 03, 2011
Here is a daily chart of the June e-minis going back to the February top. I posted this chart on my paid blog yesterday.
As you can see I now think this correction will end in the 1275-85 range (green oval). There the drop from this week's high at 1347 would equal the size of the first leg down from 1373 (smaller blue dash rectangles). The entire drop from 1373 would in turn equal the size of the February-March drop (larger blue dash rectangles). The green target oval also straddles the lower edge of the trend channel I have drawn.
Here is something which may interest you Elliott fans. I think a fourth wave triangle is developing (thin purple lines). It may be the fourth of five waves up from 666 or the fourth of five from 1002. In either case the prognosis is for a rally to a lower top, a test of the low (thus completing the triangle) and then a strong move up to new bull market highs. A move equal in size to the width of the triangle would put the ES at 1440, but I think this is a conservative estimate of the upside potential.