Friday 18 January 2008

Emini - Signs of Strength

The Emini closed down 14.50 points today and the news all around is bad. We're now down 18% from the October high. But there are signs of strength.

I am not suggesting that the Emini will rally in a straight line up from here. The markets are shut on Monday and this will give the "man in the street" more time to worry about how badly his portfolio is doing. He'll probably decide to dump and run, giving the professionals good buying opportunities on Tuesday and Wednesday.

Then at some point we should get a short covering rally. But this will not last and we will come back to test the lows of Friday and early next week. Once we've done that and everyone is convinced that the markets will fall further, then we'll start to rally.

I'm sticking my neck out by painting this possible scenario. Remember, trade what you see, not what you think. Anyway, on to the signs of strength:

Emini Basing Pattern Image

Emini Basing Pattern

Good luck with your Emini trading.

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