Here is a 30 minute bar chart showing day session e-mini trading.
I think the market established an important low yesterday at 1177. What gives me confidence in this judgment?
Take a look at the wide range down bar (in red) sitting in the middle of the first blue rectangle. That bar shows the selling wave that developed on the news of the Portugal downgrade by S&P. Two hours after that news the market began trading sideways. The following day (yesterday) news of the S&P downgrade of Spain sent the market down about 12 points, but by the time of the afternoon Fed announcement all of that break had been recovered and the market closed near its high for the day. Then early today the market opened higher and continued upward. In the process it retraced all of the loss that followed the Portugal news two days ago.
To me this sequence of events reveals a market that shows great resilience in the face of bearish news. The underlying technical condition is very strong - longer time frame traders are more long than normal and short time frame traders are less long than normal. The latter have to bid up prices until longer time frame traders are willing to sell their extra longs to the short time frame traders.
On the chart I have drawn my estimate of the market's current upward trend channel. Over the next few days I expect to see the ES move into the 1225-30 range, near the top of the channel. From there a break of 15-20 points is likely. During the next few weeks the market should move to the top of the second 40 point box I have drawn. The top of this box is just above the 1253 level at which the S&P futures established an important low in March of 2008.
I think the move up from the 1041 low on February 5 will continue for at least another month and possibly well into the summer. The 1270 level is my minimum upside target for the swing up from 1041.