Here's a daily chart of the ICE eMini TF contract for September:

Click on image to enlarge!

The support at the low is a 1.618 target extension of the prior low to high swing as established from May 25th to June 1st. Hitting this level, combined with a 50 CCI reading which was also very extended to downside and showing a divergence from price told us to be on the lookout for at least a corrective bounce. The high made yesterday was against the .382 retracement of the entire decline from the May 2nd high, and we expect to see at least a temporary hold at this retracement level if there’s still a great deal of interest in maintaining the trend to downside.

While there were also fundamental factors in play yesterday, a look at the 45 minute chart below shows that there was also a great deal of resistance on an intraday basis combined with that daily resistance level. This cluster of resistance, from 807.30 to 810.00, also represented the target derived from the last swing into the low on the 45 minute chart. This is also a classic level for price failure if we’re seeing a corrective bounce instead of the start of a new daily uptrend.

Click on image to enlarge!

Several factors raise a question as to whether or not we’ll see a new daily swing low at this point though. The daily CCI is not in the best position for an additional short side trigger. With the current configuration, it’s quite possible that the 50 CCI will find support at the top of the -100 line, and that would most likely reinforce support from the key 776.80 level labeled above, to the support zone immediately above that on the chart at 783.30. Levels are so tightly grouped there as to make the numbers illegible, which is always a good sign of strong support.

Let’s focus on this 45 minute support zone today. Of course if we should see a break below that key 776.80 level, the initial target is 758.00, the 1.272 target extension of the June 16th low to yesterday’s high. And beyond that point, we’re focusing just a bit lower to the major target on the daily chart; 753.60.

For more from Mark including his “Chart of the Day”, visit MJBraun.net.