Here is a daily bar chart showing the June e-mini contract going back to last November.The market dropped below the low of the first parallel trend line I drew on this chart. In such circumstances I usually draw a second parallel an equal distance below the first one as I have done above. Right now this second parallel is at about 1225. I don't think the ES will drop that low, but it is worth noting that there is also support in the 1215-1225 zone defined by the April 2010 top and the November 2010 top.
The first drop from the February 18 top carried the market down 50 points. It often happens that the end of a downward correction can be predicted by multiplying the size of the first drop by a whole number or a whole number plus 1/2. In this case 100 point drop ( = 2 x 50) would end near 1238 (blue rectangles). So my target zone (green oval) is 1225-1240.
Once this correction is complete I expect to see the start of a strong rally which will carry the ES to 1400 or so.
