I had to leave 45 minutes early today. Today was an outside up day. I have been saying that the 60 minute Head and Shoulders top would probably fail. The bulls showed strength today by reversing up strongly from below yesterday’s low and then rallying to above its high, creating an outside up day. At the time I am writing, the Emini has not yet gone above the right shoulder of the Head and Shoulders top, but it probably will today or tomorrow. The odds also are that it will go above last week’s high and test at least one of the other 2 highs in the October – December trading range.
It does not have to go higher and the top of the developing 3 week trading range might remain intact (last week’s high). However, the Emini is in a 2 year trading range and there are several lower highs above. In a trading range, a reversal down usually does not come after only going above one of the resistance levels. The odds are that the Emini will go above at least one more.
See the weekly update for a discussion of the price action on the weekly candlestick chart and for what to expect going into next week.