These patterns have been very confusing. Draghi’s announcement this morning put the ES just above our top call of 2007.5ES to 2010ES.
Note that since most charting software has just switched over from the March S&P E-mini contracts to the April S&P E-mini contracts, the numbers are different. So instead of a top at 2007.5ES on March 4 — we have instead a top at 1999 ES (April contract) – followed by today’s top after Draghis’ speech at 2000ES.
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Is it possible that the selloff after the Draghi announcement marks a top that happened before the market opened.
We did get 5 waves down and a retrace from below 1960 to the 1980 ES (1990 March ES) where we spent a lot of time before. So far, we have spent more than an entire week (5 trading days) in this 1975-2000 zone.
And today alone, we travelled all the way to the top end at 2000, then all the way down below 1960 in a more than 40 point drop within a few hours, then a 20 point rally –all within 1 trading session.
This is significantly bigger volatility than we’ve been seeing all week.
The other possibility I see is is that today’s low at 1960 serves as support and we rally back to highs- perhaps after a slight retrace.
Given the strength of this rally for the past few weeks, it would be awkward for the market to drop really quickly in a way that is much more than what we saw today, but it could happen depending on how pattern forms into tomorrow.