Market Overview: S&P 500 Emini Futures
The S&P 500 Emini futures weekly chart is in a 5-bar bull micro channel. The bulls see this week as a pullback and want another leg higher testing the December high. Bears want a reversal down from a lower high major trend reversal.
S&P500 Emini futures
The Weekly S&P 500 Emini chart
- This week’s Emini candlestick was a bear bar with a long tail below.
- Last week, we said that the odds slightly favor the Emini to trade at least a little higher, possibly retesting near the December high. Traders will see if the bulls can create follow-through buying or will the Emini trade higher but reverse to close with a bear body forming a double top with the December high.
- This week traded above last week’s high but reversed to close with a small bear body and above the middle of the candlestick. It was a weak bear bar.
- The bulls want 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 the 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.
- The bulls need to break far above the major bear trend line and December high to signal the end of the selloff.
- Currently, they have a 5-bar bull micro channel, which means persistent buying. They see this week simply as a pullback and want a retest of the December high.
- 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 a retest of the December high.
- They want a reversal down from a lower high 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.
- The major bear trend line remains as resistance above.
- The bears will need to create a strong follow-through bear bar closing below the 20-week exponential moving average next week to increase the odds of lower prices.
- Since this week was a bear bar with a long tail below, it is a weak sell signal bar. It follows a 5-bar bull micro channel so there may be buyers below this week’s low.
- For now, 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.
The Daily S&P 500 Emini chart
- The Emini traded higher on Tuesday but reversed to close as a small bear doji. Wednesday was a reversal down from the bear trend line with some follow-through selling on Thursday. Friday was a big bull bar closing near its high.
- Last week, we said that the odds slightly favor the Emini to trade at least a little higher. Traders will see if the bulls can break far above the major bear trend line and retest the December high, or if the Emini trades higher, but stalls and reverses lower.
- 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 December high and the major bear trend line. This week stalled around the major bear trend line again.
- Until the bulls can break far above the December high, the broad bear channel remains in play.
- 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.
- Previously, the bears got a reversal lower from a wedge bear flag (Nov 1, Nov 15, and Dec 1) around the major bear trend line.
- They see the current move up simply as a retest of the December high and want a reversal down from a lower high major trend reversal.
- This week, the bears got a reversal down testing the 20-day exponential moving average. However, they did not get sustained follow-through selling.
- They hope Friday was simply a deep pullback and want at least another small sideways to down leg.
- If the Emini trades higher, bears want a double top with January 17 high or the December high. They want the Emini to stall around the bear trend line again.
- They will need to create strong consecutive bear bars closing near their lows (like August) to increase the odds of a reversal down.
- The bears see the selloff from January 2022 as a broad bear channel.
- Since Friday was a big bull bar closing near its high, it is a weak sell signal bar for Monday. It is a good buy signal bar.
- Odds slightly favor the Emini to trade at least a little higher. The major bear trend line remains as resistance above.
- If next week trades slightly higher, but stalls and reverses lower with follow-through selling, the odds of a deeper pullback will increase.
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