By Mike Paulenoff, MPTrader.com
This has been a fascinating session largely because after all of yesterday's volatility and then very powerful last-hour rally, today's action amounted to a marginal upside follow-through into our preferred target zones in the E-Mini S&P at around 1040 and in the E-Mini Nasdaq at 1403.
From those target levels, which were met right around the opening bell, the indices really have been on the defensive for the remainder of the day. The question is: Do we have a significant peak in the making or is this just another pullback ahead of an even larger up-move?
Based on my work, I think we've established a significant micro peak at 1039.75 in the E-Mini S&P and then 1403.50 in the E-Mini Nasdaq. The selling pressure so far has done a minimal amount of damage but is noteworthy in that we are back inside the ranges that were created after last Friday's rally on the employment data into yesterday morning's pivot reversal to the upside.
So, having popped out of the three-day sideways trading range and yet only able to make minor marginal new highs, it seems to me that the market is running out of gas on the upside and that it is in the very early stages of having a significant correction of a percentage, if not the entirety, of the up-leg from the September 30 lows.