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Emini Retesting December High

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Market Overview: S&P 500 Emini Futures

The S&P 500 Emini futures weekly candlestick was a bull bar retesting December high. It was also a breakout above the bear trend line. The bulls will need to create follow-through buying over the next several weeks. Bears see the selloff from January 2022 as a broad bear channel and want a reversal down from a double top major trend reversal with the December high.

S&P500 Emini futures

The Weekly S&P 500 Emini chart

Emini Weekly: 6-Bar Bull Micro Channel, Retesting December High?
  • This week’s Emini candlestick was a bull bar closing in the upper half with a prominent tail above.
  • Last week, we said that the odds slightly favor the Emini to still be in the second leg of a sideways to up phase. Traders will see if the bulls can break far above the bear trend line, or if the Emini stalls around it and reverses lower.
  • This week broke above the bear trend line retesting December high. The bulls will need to create a follow-through buying over the next several weeks.
  • The bulls got a reversal up from a higher low major trend reversal (Dec 22) and a double bottom bull flag (Nov 3 and Dec 22).
  • The current move is the larger second leg sideways to up retesting December high. 
  • They see the last 6 months as forming an inverted head and shoulders, with the December low being the right shoulder.
  • However, inverted head and shoulders pattern often ends up as bear flags instead of a reversal pattern.
  • Currently, they have a 6-bar bull micro channel, which means persistent buying. The bulls want a retest and breakout above the December high.
  • They need to break far above the major bear trend line and December high with follow-through buying to signal the end of the selloff. 
  • Previously, the bears got a pullback lower from a wedge bear flag (Oct 5, Nov 15, and Dec 1), a double top bear flag (Sept 12 and Dec 1) and a lower high.
  • The bears see the current move up simply as retesting December high.
  • They want a reversal down from a double top major trend reversal with the December high.
  • Bears see the selloff from January 2022 as a broad bear channel. Until the bulls can break far above the December high, the broad bear channel remains in play.
  • Since this week was a bull bar closing in its upper half, it is a buy signal bar for next week. It is a weak sell signal bar.
  • For now, odds slightly favor the Emini to still be in the second leg of a sideways to up phase, probably testing the December high.
  • Traders will see if the bulls can create strong follow-through buying over the next several weeks, or if the Emini trades higher but stalls and reverses lower around the December high.

The Daily S&P 500 Emini chart

Emini Daily: Retest Dec High, Wedge 2nd Leg
  • The Emini traded higher on Monday followed by a deep pullback on Wednesday which reversed to close as a big bull bar near its high. Thursday and Friday broke above the bear trend line.
  • Last week, we said that odds slightly favor the Emini to trade at least a little higher and the major bear trend line remains as resistance above.
  • This week broke above the bear trend line with some follow-through buying.
  • The bulls got a larger second leg sideways to up from a double bottom bull flag (Nov 3 and Dec 22) and a higher low major trend reversal.
  • They want a retest followed by a breakout above the December high. 
  • Until the bulls can break far above the December high, the broad bear channel remains in play.
  • On Wednesday, the gap down and strong selloff which reversed into a strong bull bar was a sign of strength from the bulls.
  • The bulls need to create strong consecutive bull bars closing near their highs and trading far above the major bear trend line and December high, to convince traders that the selloff from January has ended.
  • The December high is close enough and may be tested next week.
  • Previously, the bears got a reversal lower from a wedge bear flag (Nov 1, Nov 15, and Dec 1) but did not get sustained follow-through selling.
  • They see the current move up simply as a retest of the December high and want a reversal down from a double top major trend reversal.
  • The Emini has 3 pushes up in the current leg therefore a wedge (Jan 6, Jan 17 and Jan 27).
  • Because of the strong leg up, the bears will need a strong reversal bar or at least a micro double before the bears will be willing to sell more aggressively.
  • The bears see the selloff from January 2022 as a broad bear channel, even if the Emini trades slightly above the December high.
  • Since Friday was a bull bar with a long tail above, it is a weaker buy signal bar for Monday. It is not a strong sell signal bar.
  • Odds slightly favor the Emini to trade at least a little higher retesting December high.
  • Traders will see if the bulls can create a strong breakout above December high or if next week trades slightly higher, but stalls and reverses lower around the December high.

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