Emini Futures Looking for a Breakout

Here is an early morning update on the Emini Futures (September Contract).  Shown on the left is the September contract.  Right now at 7am they are up about 6 points or so.

Looking at the little chart of the emini futures to the left it appears that there is a general tendency towards an ascending triangle since the first part of May.  This really could be a huge bear trap in the making.

The sideways consolidation that we have had so far since early May has been quite orderly looking to me.  We are not really giving that much back in terms of price.  So at least for now I can only presume that the bulls have the upper hand still despite all the current talk of a larger correction.  Of course my whole argument is going to be invalidated on a break down in the emini futures below that lower red boundary line shown on the chart that makes up this somewhat odd looking ascending triangle pattern.

But indeed this would be quite a bear trap if we are able to get a good strong jump ‘over the creek’ of the 922 level and hit all sorts of buy stops up there.  I haven’t been talking to too many bears lately (sounds funny doesn’t it?) but my sense is that the bears think we have come too far too fast and that the old bear of 2008 needs to get us back down again.

But it just does not look like that is in the cards quite yet. Indeed, if we manage a breakout on the emini futures above that red horizontal line as I suspect, it could lead to quite an extended move. Why? Because the nature of the recent correction has been quite tame and we have to assume internal strength in the market right now in my opinion.

There is another subtle point I should make about the pattern in the chart above. That green shaded area looks a little bit like an inverse head and shoulders pattern. If true then it has measurement implications to about 950 or the top of the false breakout range that starting beginning of June.

So do we get the breakout in the emini futures or not? Well hold on to your seats, maybe we will know by next week, and if we are really lucky by the end of this week.