Many signs are pointing to this recent rally having some legs. I'm not convinced yet. I've spoken about the 837 area in past posts and we've yet to have a convincing close above it. Each time we approach it, we seem to fall back.
From a broad perspective, we look at the ES weekly chart. As you can see, we are merely at the 50% - 61.8% retracement area and look poised for a fall. Also, most all MA's you put on this weekly chart show us clearly still below it. I'm not drinking the kool-aid yet, but I am staying open to the posibility.
Good hunting traders!
Another sign we may have reached the end of this rally. I noticed that the rally of July and August of 2008 looked strikingly similar to the rally we are seeing now. It rallied hard, but then slowly rounded over and fell. If we are going to repeat this same pattern, we seem to be in the "rounding" phase now.
Here is a comparison to another previous rally, looking a little further back. Also, notice the trendline we are running into.
Lesson