Bear Army Counterattacks

Here is an hourly chart of the December S&P e-mini futures. I last commented on this market here.

Around 10 am Eastern Time today the bear army staged a counterattack which dropped the futures 10 points in less than 30 minutes. This shows as the last wide range down bar highlighted in red on the chart.

Note that the selling started at a higher level than did the selling during Monday's opening bar but it dropped the market about the same amount. I think the same people were responsible for both selling episodes. But I also think that the bull army will turn back this bearish counterattack. Why?

First, as I observed above, the selling started at a higher level than did Monday's early selling. This tells me that the bears are beginning to run out of ammunition. Second, note the two wide range up bars highlighted in green which developed during yesterday's opening hour and between 2:30 and 3:30 ET. Both bars show aggressive buying. The low of the first bar was 1392.25 and the low of the second was 1395.25. I think that the bears will not be able to push the market past the bullish defenses in the 1392-95 zone.

The next development will be a resumption of the rally to 1418-20.