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Emini Losing Momentum

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Market Overview: S&P 500 Emini Futures

The weekly chart indicates an Emini losing momentum with the progressive smaller bull bars in the last 3 weeks. If the market trades lower, the bulls want the 20-week EMA or the bull trend line to act as support, forming a double bottom bull flag with the September 6 low. The bears want the market to stall around the current levels and start forming bear bars.

S&P500 Emini futures

The Weekly S&P 500 Emini chart

Emini Weekly: Starting to Stall, Pullback or HH MTR?, Emini Losing Momentum
  • This week’s Emini candlestick was a bull doji closing below the middle of its range.
  • Last week, we said that the odds slightly favor the market to still be in the sideways to up phase. Traders would see if the bulls can create a breakout into new all-time high territory with follow-through buying or if the market would stall around the July high area forming some bear bars in the weeks ahead instead.
  • The market made a new all-time high this week but closed below last week’s high.
  • The bulls hope the market is in the broad bull channel phase and want a resumption of the move.
  • They must create a strong breakout with follow-through buying to increase the odds of the trend resuming.
  • If the market trades lower, they want the 20-week EMA or the bull trend line to act as support, forming a double bottom bull flag with the September 6 low.
  • The bears see the current rally as a retest of the prior all-time high.
  • They want a reversal from a double top (Jul 16 and Sep 26) and a higher high major trend reversal.
  • They want the market to stall around the current levels and start forming bear bars.
  • They need to create a few strong bear bars to indicate that they are back in control.
  • Since this week’s candlestick is a bull doji closing in its lower half, it is not a strong buy signal bar.
  • The candlesticks are becoming smaller over the last 3 weeks indicating a loss of momentum. The risk of a minor pullback is increasing.
  • If the bulls can’t create a strong breakout with follow-through buying, we may see another pullback form (probably towards the 20-week EMA area) within a few weeks.
  • For now, traders will see if the bulls can create another breakout into new all-time high territory with follow-through buying.
  • Or will the market stall around the current levels, forming bear bars in the weeks ahead instead?

The Daily S&P 500 Emini chart

Emini Daily: Stall, Pullback / Profit Taking or HH MTR?
  • The market traded sideways to up for the week. Thursday gapped higher but closed as a bear bar with a long tail below. Friday was an inside bear bar closing in its lower half.
  • Last week, we said that the odds slightly favor the market to still be in the sideways to up phase. Traders would see if the bulls can create a strong breakout above the September 19 high with follow-through buying or if the market would trade slightly higher but stall and reverse lower in the weeks ahead.
  • The market traded higher for the week but closed below the September 19 high.
  • The bulls hope the rally is in a broad bull channel phase and want a resumption of the move.
  • They want a strong breakout above the all-time high with follow-through buying.
  • The move up since the September 11 low is in a tight bull channel which means persistent buying.
  • However, the increasing overlapping candlesticks in the last 2 weeks indicate a loss of momentum.
  • If the market trades lower, they want a reversal from a double bottom bull flag with the September 6 low.
  • They want the 20-day EMA or the bull trend line to act as support.
  • The bears see the current rally as a retest of the all-time high.
  • They want a reversal from a higher high major trend reversal and a double top with the prior all-time high (Jul 16).
  • They need to create consecutive bear bars closing near their lows trading far below the 20-day EMA to show they are back in control.
  • For now, the market remains Always In Long.
  • However, if the market continues to stall, we may see a minor pullback testing the 20-day EMA in the weeks ahead.
  • Traders will see if the bulls can continue to create a follow-through buying, breaking into new all-time high territory.
  • Or will the market trade stall and reverse lower, forming a retest of the September 11 low instead?

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