Here is a daily bar chart of the December e-minis going back to early July. I now think the market's low at 1147.50 last week was the first higher low in an extended up trend. If the move up from that level matches the size of the October rally it will carry the ES to 1370 (blue dotted rectangles). The upper line of the dash green trend channel as well as the purple dotted trend line will be in that neighborhood late this month. So the target zone for the move is 1370 plus or minus 10 points (green oval).The last 6 months or so have been the strangest period I've seen in the markets over the past 40 years. The market is concerned about only one thing - the possibility of a banking panic in Europe. Every piece of news, every policy action (or lack of same) by the central banks involved has generated a big swing in one direction or another which is quickly reversed by a swing in the opposite direction.
This up swing may turn out to be just one more page in this chapter of aimless volatility. But I am betting that it is not. Instead I think the market will interpret yesterday's central bank actions as a commitment to rescue the European banking system no matter what else happens. If I am right about his then the market is now headed well above the 1400 level.
