JAN24 1930EST. S&P500 futures (front-month, e-mini Mar 2013 contract: ESH3) rallied this morning into resistance from a well-defined, 30-month price channel.
Upon a relatively precise touch of this resistance at 1497.75, the futures contract and the overall market sold off in the late morning / early afternoon, forming a topping tail daily candle.
The chart follows below. The channel in question reaches back to the lows of July 2010 and is marked on the chart as a yellow dashed line.
Of note: the difference between price and the 200-period simple moving average, shown by the oscillator below the price graph, is elevated but not extreme -- buttressing the point that a market sell-off is not necessarily the inevitable outcome of the recent bullish price action.
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| ES (E-mini S&P500 futures contract). April 2010 to January 2013. Daily candles. |
