Market Overview: S&P 500 Emini Futures
The S&P 500 Emini futures weekly candlestick was a weak bull follow-through bar. The Emini is in a smaller 22-week trading range around 3750 and 4200. The market is currently trading around the middle of this range. Poor follow-through and reversals are hallmarks of a trading range. Traders will BLSH (Buy Low, Sell High) until there is a strong breakout from either direction.
S&P500 Emini futures
The Weekly S&P 500 Emini chart
- This week’s Emini candlestick was a bull bar closing slightly below the middle of the range with a long tail above.
- Last week, we said that traders will see if the bulls can create a follow-through bull bar or will the weekly candlestick form a surprise breakout below the December low.
- This week traded above the 20-week exponential moving average but reversed to close below it. It was a weak bull follow-through bar.
- The bears see the move up to February 2 high simply as a two-legged swing up.
- They got a reversal down from a higher high major trend reversal.
- They then got a second leg sideways to down from a lower high major trend reversal (Mar 6).
- While some traders may view December high as a major lower high, the bears would need to see a break above the August high to be sure of the end of the bear trend.
- The bears hope that the last two weeks were simply a pullback and want another leg down forming the wedge pattern with the first two legs being March 2 and March 13.
- Since this week was a bull bar with a long tail above closing slightly below the middle of the bar, it is a weaker sell signal bar for next week.
- The bears need to create follow-through selling to increase the odds of a retest and breakout below the December low.
- The bulls see the last 8 months as forming an inverted head and shoulders, with the December low being the right shoulder.
- However, an inverted head and shoulders pattern often ends up as a bear flag instead of a reversal pattern.
- The bulls hope that the current pullback will form a higher low and reverse up from a double bottom bull flag with the December low (Dec 22 and Mar 13).
- By breaking above the December high, they hope the bear trend of successively lower highs and lower lows has ended.
- More likely, they will need to break far above the December and August highs to signal the end of the selloff.
- While the bulls got follow-through buying this week, the long tail above indicates the bulls are not yet very strong.
- They will need to continue creating follow-through buying to increase the odds of a reversal up retesting February high.
- If the Emini trades lower, the bulls want a reversal up from a double bottom with March 13 low.
- The Emini is in a smaller 22-week trading range around 3750 and 4200. The market is currently trading around the middle of this range.
- Traders will BLSH (Buy Low, Sell High) until there is a strong breakout from either direction.
- Poor follow-through and reversals are hallmarks of a trading range.
- For now, traders will see if the bulls can create another follow-through bull bar or will the Emini continue to stall around the 20-week exponential moving average.
The Daily S&P 500 Emini chart
- The Emini traded higher earlier in the week. Wednesday traded higher but reversed into a big outside bear bar. Friday traded lower but reversed into a bull bar closing near its high.
- Last week, we said that traders will see if the bears can create another leg down, breaking below the December low or will next week trades slightly lower but reverse from a double bottom with March 13 low.
- The bears see the move up from October 2022 simply as forming a double top bear flag (Aug 16 and Feb 2) within a broad bear channel.
- They determined that the August high is the last major lower high, therefore, believe that the Emini is still in a bear trend.
- They want a strong break below the December low and a retest of the October low.
- The bears recently got the second leg sideways to down from a lower high major trend reversal (Mar 6).
- They now want a reversal down from a double top bear flag (Mar 6 and Mar 22) and a small wedge bear flag (Mar 14, Mar 16 and Mar 22).
- They see the move up from March 13 low simply as a pullback and want another leg down completing the wedge pattern with the first two legs being February 24 and March 13.
- The problem with the bear’s case is that the buying pressure since March 13 low is slightly stronger with bull bars closing near their highs and bear bars having little follow-through.
- They need to create consecutive bear bars closing near their lows breaking far below the December low to increase the odds of lower prices.
- The bulls got a breakout above December high but did not get sustained follow-through buying.
- By trading above the December high, the bulls hope that the bear trend has ended, and the market has either transitioned into a trading range or a bull trend.
- Recently, the bulls got a reversal up from a double bottom bull flag (Dec 22 and Mar 13).
- However, there are a lot of overlapping candlesticks which indicates that the bulls are not yet very strong.
- They want a retest of February high and another big leg up, completing the wedge pattern with the first two legs being December 1 and February 2.
- They need to break far above the December and August highs, to convince traders that the bear trend from January 2022 has ended.
- The bulls hope that Wednesday to Friday was simply a pullback and wants at least another small leg up to retesting March 22 or March 6 highs.
- Since Friday was a bull bar closing near its high, it is a buy signal bar for Monday.
- The Emini may trade slightly higher early next week.
- Traders will see if the bulls can get sustained follow-through buying or will next week trades slightly higher but stall around March 22 or March 6 highs and reverse down from a double top bear flag (Mar 6).
- The Emini is in a smaller 22-week trading range around 3750 and 4200 within a larger trading range.
- Traders will BLSH (Buy Low, Sell High) until there is a breakout from either direction.
- Poor follow-through and reversals are hallmarks of a trading range.
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