Weekly Emini Retest All-Time High

Market Overview: S&P 500 Emini Futures

The market formed a weekly Emini retest all-time high in the form of strong consecutive bull bars. The bulls want a retest of the all-time high and a resumption of the broad bull channel. The bears want a reversal from a lower high major trend reversal or a double top with the all-time high.

S&P500 Emini futures

The Weekly S&P 500 Emini chart

• This week’s Emini candlestick was a consecutive big bull bar closing near its high.
• Last week, we said that the odds slightly favor the market to have flipped into Always In Long. Traders will see if the bulls can create another follow-through bull bar testing near the all-time high or if the market would trade slightly higher but stall and form a small pullback instead.
• The bulls got another consecutive bull bar testing near the all-time high.
• Previously, they got a reversal from a double bottom bull flag (Apr 19 and Aug 5).
• They hope that the market is in the broad bull channel phase. 
• They want a retest of the all-time high and a resumption of the broad bull channel.
• The move up is strong enough for traders to expect at least a small second leg sideways to up after a small pullback.
• If there is a deep pullback, they want the 20-week EMA to act as support.
• The bears see the current move simply as a retest of the prior high.
• They want a reversal from a lower high major trend reversal or a double top with the all-time high.
• Because of the strong move up, the bears will need a strong reversal bar or a micro double top before traders consider selling aggressively.
• Since this week’s candlestick is a bull bar closing near its high, it is a buy signal bar for next week.
• Odds slightly favor the market to have flipped into Always In Long.
• While odds continue to favor sideways to up, the move up since the August 5 low is slightly climactic.
• The market may need to trade sideways to down for a week or two to relieve the overbought condition.
• If a pullback forms, traders will see the strength of the pullback. If it is weak and sideways (with doji(s), bull bars and overlapping candlesticks), the odds of another leg up will increase.
• For now, traders will see if the bulls can create another follow-through bull bar testing near the all-time high.
• Or will the market start to stall and form a minor pullback instead?

The Daily S&P 500 Emini chart

• The market traded higher in the first half of the week. Thursday opened higher but reversed into an outside bear bar. Friday was an inside bull bar.
• Last week, we said that the odds slightly favor the market to be in the sideways to up phase with minor pullbacks in between. The move up while strong, is slightly climactic and may need to form a small sideways-to-down pullback before it resumes higher.
• The last 5 candlesticks are overlapping sideways. The minor pullback phase may have begun.
• The bears see the current move as a retest of the prior high.
• They want a reversal from a lower high major trend reversal and a double top with the all-time high.
• They need to create consecutive bear bars closing near their lows trading far below the 20-day EMA to increase the odds of a deep pullback.
• The bulls hope the rally is in a (broad) channel phase and want a resumption of the move.
• They got a reversal from a parabolic wedge (Jul 19, Jul 25, and Aug 5), a trend channel line overshoot and a double bottom bull flag (Apr 19 and Aug 5).
• The move from the August 5 low is in a tight bull channel. That means strong buying.
• The market likely has flipped into Always In Long.
• Traders expect at least a small second leg sideways to up after a pullback.
• If there is a deeper pullback, they want a reversal from a higher low major trend reversal and the 20-day EMA to act as support.
• For now, odds slightly favor the market to be Always In Long with minor pullbacks in between.
• The move up from the August 5 low while strong, is slightly climactic.
• The market may need to form a small sideways-to-down pullback before it resumes higher. The pullback phase may have begun this week.
• If a pullback forms, traders will see the strength of the pullback.
• If it is weak and sideways (filled with doji(s), bull bars and holding around the 20-day EMA), the odds of another leg up to retest the all-time high will increase.
• For now, traders will see if the bulls can continue to create follow-through buying.
• Or will the market continue to stall forming a two-legged sideways to down pullback to the 20-day EMA?

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