Today and tomorrow are the days that will determine if we are in a continuation pattern for the stock indices S&P and Dow or are still flirting with the downside. It's not only my reaction line/ ML technical approach that tells me this but also many other folk watching potential bearish patterns plus other commentators who tend to more or less agree that a close this week above 1390 ( June 12 EP ) or 13100 (YM M12) will see a continuation of the long term trend up and signify the end of the recent correction with 1352.50 as the low.
In many respects for me it is not so much PRICE that is important but TIME. What i mean by this is that for a continuation up we need to see not only new highs but pass through several reaction bar count zones which are located over the coming days. I am still uncertain and as such am not looking for a position. Price (today) i believe want's to go higher, this i observe from the manner in which it finds support when it retraces, moves up through reaction line resistance etc but I am still wary of the downside but this is slowly diminishing after recent price action.
I believe the next few days will reveal the direction for the coming weeks perhaps months and today and tomorrows sessions will volatile and sideways.
Here is a simplified chart of the ES M12:
and the detail showing just that one reaction line.
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