3/15 update: looks like we got that overnight break of 2002 that we needed to keep the bears alive by a thread–assuming no rally later today. Otherwise, if we break upside, then bulls will take control.
This chart is looking at the April S&P E-mini futures contract (as opposed to the May one). We broke above resistance at 2000ES on March 4 and again on March 10 with Draghi’s announcement.
But we found super strong and fast support 1960 – which supports further upside. With the overnight consolidation on Sunday night into Monday morning that find support at 2002ES @ 10am, the market resumed upside since then — only pulling back at the close in what looks like a wave 2 so far.
The fact that consolidation happened for so long is, in my opinion, not good for the bears. Further, the fact that support was found at 2002 – which is just a few points away from where prior resistance (now support) was — at 2000 — tells me that it won’t be that easy to move back to the downside. The fact that we rallied so fast and hard from the 1960 support also tells me that we might not get that major downside that we were open to getting. As each day consolidates, it’s becoming less and less likely that we revisit the 1800 lows. Those lows may have been the wave IV down and we are on our way to new highs.
While this region was an opportunity for a wave 3 down to begin — the market hasn’t followed through. So I have to lean upwards for now – unless we see some strong clues soon–as in overnight — a break of today’s low at 2002 would be a minimum requirement.