Market Overview: S&P 500 Emini Futures
The weekly S&P 500 Emini chart is forming a minor Emini pullback. The bulls want a strong retest of the March 21 high followed by a strong breakout above, starting the larger bull channel phase. The bears want at least a small second leg sideways to down after a pullback. If the market trades higher, they want a reversal from a lower high major trend reversal.
S&P 500 Emini Futures
The Monthly Emini Chart
- The March monthly Emini candlestick was a bear bar closing below March’s low with a prominent tail below.
- Last month, we said that until the bears can create a strong sell signal bar, odds continue to favor the market to trade sideways to up.
- April’s candlestick formed a sell signal bar following 5 months of strong rally.
- The bulls got a strong rally starting in October in the form of a 6-bar bull microchannel.
- Sometimes, there may be buyers below the first pullback following such a strong bull microchannel.
- If there is a deeper pullback, the bulls want another strong leg up completing the wedge pattern with the first two legs being July 27 and March 21.
- They want any pullback to be sideways and shallow (filled with weak bear bars, bull bars, doji(s) and overlapping candlesticks).
- They want the pullback to form a higher low and the 20-month EMA or the bull trend line to act as support.
- The bears want a failed breakout above the all-time high, a reversal from a higher high major trend reversal and a large wedge pattern (Dec 2, July 27, and March 21).
- They got a sell signal bar in April. They will need to create follow-through selling to increase the odds of testing the 20-month EMA.
- Since April was a bear bar closing in its lower half, it is a sell signal bar for May.
- The market remains Always In Long and the move up from October is in a 6-bar bull microchannel.
- There may be buyers below the first pullback from such a strong bull microchannel (perhaps holding the market up in the first half of May).
- The rally has lasted a long time and is slightly climactic. April was the first sign of a possible pullback phase.
- For now, the bears need to create follow-through selling to increase the odds of the pullback phase lasting at least 2-3 months.
- Traders will see if the bears can get a follow-through bear bar, or will the market reverse up retesting the prior high (Mar 21) instead.
3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or
remove ads
.
The Weekly S&P 500 Emini Chart
- This week’s Emini candlestick was a bull doji with a long tail below closing near its high and trading above the 20-week EMA.
- Last week, we said that traders would see if the bulls can create a strong follow-through bull bar this week. The stronger the pullback (bounce), the more it will cast doubt on the strength of the bear’s resolve.
- The market traded sideways to down for most of the week but gaped up on Friday and closed the week as a bull doji with a long tail below. The bulls managed to get a follow-through bar albeit not a strong one.
- The bulls have a strong rally in the form of a tight bull channel.
- They hope that the rally will lead to months of sideways to up trading after a pullback (broad bull channel).
- They want a strong retest of the March 21 high followed by a strong breakout above, starting the larger bull channel phase.
- At the very least, they hope to get a small retest of the prior trend extreme high (Mar 21), even if it only leads to a lower high (thereby forming a lower high major trend reversal).
- If the market trades lower, they want the 20-week EMA to continue acting as support.
- The bears got a reversal from a higher high major trend reversal and a large wedge pattern (Feb 2, July 27, and Mar 21),
- They also got a final flag reversal (ioi pattern in March).
- They hope to get a TBTL (Ten Bars, Two Legs) pullback of at least 5-to-10%. They want at least a test of the 20-week EMA.
- The selloff has retraced more than 5% and has tested the 20-week EMA.
- The bears want at least a small second leg sideways to down after a pullback.
- If the market trades higher, they want a reversal from a lower high major trend reversal.
- Since this week’s candlestick is a bull doji with a long tail below, it is a buy signal bar albeit weaker.
- The market could still be in the sideways to up pullback phase.
- However, traders should be open to the possibility of a second leg sideways to down after the current pullback.
- Traders will see if the 20-week EMA will continue to act as support if the market retests it in the weeks ahead.
- For now, traders will see if the bulls can create a strong follow-through bull bar or will the market stall around the current levels followed by a second leg sideways to down.
- If the market retests the March 21 high instead but is weak (with doji(s), bear bars, and overlapping candlesticks), the odds of another strong leg down from a lower high major trend reversal will increase.
3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or
remove ads
.