Market Overview: S&P 500 Emini Futures
The bears want an Emini failed breakout following a possible buy climax (big bull bar late in a trend). They need to create a couple of consecutive bear bars closing near their lows to increase the odds of a failed breakout and a TBTL (ten bars, two legs) pullback lasting at least a few weeks will increase. The bulls hope this week was a pullback and want a retest of the November 11 high, even if it forms a lower high.
S&P500 Emini futures
The Weekly S&P 500 Emini chart
- This week’s Emini candlestick was a bear bar closing near its low. The market gapped up slightly and traded sideways to down for the week.
- Last week, we said that the candlestick after an outside bar sometimes is an inside bar or has a lot of overlapping range. Traders will see if the bulls could create follow-through buying or if the bulls would be disappointed with poor follow-through buying over the next few weeks instead.
- This week was almost an inside bear bar. There was no follow-through buying following a possible buy climax (big bull bar late in a trend).
- The bulls see the market as being in a broad bull channel.
- They got another leg up, completing the wedge pattern (Mar 21, Jul 16, and Nov 11) and the embedded wedge (Aug 30, Oct 17, and Nov 11).
- They got a strong breakout last week but could not create a follow-through bull bar. The bulls are not as strong as they hoped to be.
- They hope this week was a pullback and want a retest of the November 11 high, even if it forms a lower high.
- If there is a deeper pullback, they want the 20-week EMA or the bull trend line to act as support.
- The bears want a reversal from a large wedge (Mar 21, Jul 16, and Nov 11), an embedded wedge (Aug 30, Oct 17, and Nov 11) and a micro double top (Nov 8 and Nov 11).
- They hope that the recent sideways candlesticks (end of Sept to early Nov) will be the final flag of the move.
- They see last week’s big bull bar appearing late in a trend as buy climax.
- They want a failed breakout followed by a pullback to retest the bottom of the (possible) final flag or the 20-week EMA.
- If the bears can create a couple of consecutive bear bars closing near their lows, the odds of a failed breakout and a TBTL (ten bars, two legs) pullback lasting at least a few weeks will increase.
- Since this week’s candlestick is a bear bar closing near its low, it is a sell signal bar for next week.
- While this week was not an inside bar (the high of this week traded slightly above last week’s high), it is almost an inside bar.
- Therefore, the recent candlesticks may behave as if it is forming an ioi (inside-outside-inside) breakout mode pattern.
- Odds slightly favor a breakout below the (almost) ioi (inside-outside-inside) pattern first. The first breakout can fail 50% of the time.
- For now, the market may trade at least a little lower.
- There may be disappointed and trapped bulls by the lack of follow-through buying this week.
- Traders will see if the bears can create follow-through selling. If they do and manage to form a few strong consecutive bear bars, the odds of a pullback lasting at least a few weeks will increase.
- Or will the bears fail to create follow-through selling?
- The move up since October 2023 while strong, has lasted a long time and is slightly climactic. The odds of a TBTL (ten bars, two legs) pullback are increasing.
The Daily S&P 500 Emini chart
- The market gapped higher on Monday but lacked follow-through buying. The market then traded sideways to down for the rest of the week. Friday gapped down and closed below the 20-day EMA.
- Last week, we said that the market may trade slightly higher. Traders will see if the bulls could continue to create follow-through buying or if the market will stall in the next few weeks instead.
- The bulls got the third leg up to complete the large wedge pattern (Mar 21, July 16, and Nov 11) and the third leg to complete the embedded wedge (Aug 30, Oct 17, and Nov 11).
- They see the market trading in a broad bull channel and want the move to continue for many months.
- They hope that this week is simply a pullback. They want the 20-day EMA or the bull trend line to be support areas.
- The bears want a reversal from a higher high major trend reversal.
- They want a reversal from a large wedge pattern (Mar 21, Jul 16, and Nov 11), an embedded wedge (Aug 30, Sep 25, and Nov 11) and a final flag (end of Sept to early Nov).
- They see last week’s strong move up as a buy climax and forming exhaustion gaps.
- They want a deep pullback lasting at least a few weeks – a TBTL (ten bars, two legs) pullback.
- The next targets for the bears are the bottom of the final flag and the bull trend line.
- They need to create consecutive bear bars closing near their lows trading far below the 20-day EMA and the bull trend line to show they are back in control.
- If there is a pullback, the bears want the market to form a lower high major trend reversal or a double top with the November 11 high.
- Friday’s gap down created an island top on the daily chart.
- The lack of follow-through buying following last week’s possible buy climax indicates that the bulls are not as strong as they hope to be.
- If the bears can create more follow-through selling breaking far below the 20-day EMA and the bull trend line, the odds of a pullback lasting at least a few weeks will increase.
- For now, traders will see if the bears can create more follow-through selling.
- Or will the market stall around the 20-day EMA or the bull trend line area, followed by a retest of the November 11 high instead?
- The move up since October 2023 has lasted a long time. The wedge and embedded wedge increase the odds of a pullback lasting at least a few weeks.
Trading room
Al Brooks and other presenters talk about the detailed Emini price action real-time each day in the BrooksPriceAction.com trading room. We offer a 2 day free trial.
Market analysis reports archive
You can access all weekend reports on the Market Analysis page.
