Interesting Development in the Futures

Tails on a candlestick usually help define a rejection in price. Consecutive candlesticks with tails give an even stronger signal. The chart above is the S&P E-Mini Futures Contract. The S&P Cash Index does not look similar. In fact the S&P Cash looks like it is perhaps consolidating, however the tails on the Futures hint that a top is near as prices have found resistance. This signal has worked since the rally began. Also to note is divergence in the indicators. Recent breadth has broken down after failing to make a new high despite prices doing so. When I first made this indicator I stated it seemed to point out when a rally is beginning to reverse and starts heading down before price does. Lets see if this does occur because this will be the first time this has happened since I've developed the indicator.

With all of this said, I still think the market has room to run. I really like the chart I posted last night of the Nasdaq Futures. If we can somehow manage to reach that 61.8% retracement on the Nasdaq while maintaining a string of tails on the /ES I believe that would be a gift for bears. That would be the perfect scenerio. Another scenerio I could see would be prices slowly drift down 30-40 points a day, perhaps maintening doji type formations, and then we have a strong down day, perhaps as early as friday. But now I'm just pulling strings. So lets see what happens. I will stick with Elliott Wave one last time and say that our next pullback like the one we saw in the beginning of this month, will be the real deal and we will see 900 before we see 1200.