Wednesday, November 10, 2010

reaction - then higher

Here is an hourly bar chart showing e-mini 24 hour trading. The first attempt at a breakout above the April top at 1216.75 has failed. The subsequent reaction is likely to continue downward to the green oval in the 1190-95 zone. That is the confluence of the lower channel line for the two trend channels I have drawn in red as well as support defined by the October 25 top at 1193.

Once this drop is over I expect the e-minis to resume the move to 1300 and higher. Next significant resistance will be 1250, the level of the March 2008 low made when Bear Stearns failed.

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