The Missing Part

The support at the red arrow seems come out of nowhere to me at first glance. Later on I realized that, by zooming out a little bit, it's the lower boundary the market formed six days ago. Not completely satisfied, I looked around and found an important missing part of the pattern.

The E-Mini was consolidating withing a channel (the yellow lines) in the past three days. Most of the consolidation was hidden away from stock traders while they were asleep. After breaking out, the upper channel was tested and here comes the support level, marked by the yellow arrow in the E-Mini chart. The consolidation, plus the successful test, plus the sharp bounce off from the upper channel, makes a strong bullish case with target at least around 1005. The length of the consolidation and the sharp retest do increase the probability for a higher target. Nonetheless, it is possible that the future market hits the target in the night and tomorrow morning when stock market opens it returns to today's closing level, or even worse.

I feel kind of frustrated as a stock trader because the battle field is not the stock market. The major movements are in the future market and stock traders could not do much other than following the future market. This reflects how tough the trading could be during an OE week.

Another thing alerts me is the giant sell-off at Sunday night. It revealed overwhelming downward forces. Trading a stock market that moves against it would be tougher.