I think there is a special situation in the EuroStoxx futures. It rocked up from below its multi-week trading range up into new territory, a huge move in just 3 days. Ordinarily this would be very bullish. However most of the volume came right at the very bottom (the innovators) and the very top (the laggards). There is much more volume at the top and it’s at the very top (almost to the tick for the volume yesterday). This makes the profile very top-heavy. And when things get too top heavy they tip over.
If the stoxx were to drop down a bit, these late longs would be in a losing position and could run for the doors. This would cause a fast corrective drop.
Now I’m not predicting this will happen. It could rocket up. But I do see an assymetrical opportunity. For a little risk on the upside there could be a large payoff on the downside.
I think a 50% correction would shake out these weak longs and allow some new longs to come in and that would be healthy for a continuation up.
2882 would be a first target. After breaking out from a trading range it’s normal to retest it, and even dip back in a bit. 2866 would be the 2nd target and then 2838.