Update

A little while ago the e-minis hit 1156, the repetition target I cited for the market in my last post.

Since that post was written I have changed my mind about the extent of this rally. I now think the market is headed for 1250 before the bear market resumes. Why?

First of all, on my chart page you can see that the 5 and 10 day oscillators of the advancing issues numbers exhibited bullish divergences at the low a couple of days ago. That low at 1068 was clearly a shakeout low below the August 9 low of 1071, and the subsequent rally has been a classic lock-out rally, one with relatively small reactions which drives relentlessly higher.

Second, I think there is quite a lot of short term bearish sentiment among traders - not enough to end a bear market but sufficient to trigger a substantial bear market rally.

So I think the market is headed back to the top of its August-September trading range and will probably stage a false upside breakout near the end of this rally. After the rally is complete I expect the ES to resume its drop to 950.