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Emini Retest of the March High

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Market Overview: S&P 500 Emini Futures

The weekly chart is forming an Emini retest of the March high. The bulls want a strong retest of the March 21 high followed by a strong breakout above, starting the larger bull channel phase. The bears want at least a small second leg sideways to down after the current pullback, even if it forms a higher low. 

S&P500 Emini futures

The Weekly S&P 500 Emini chart

Emini Weekly: Retest Mar High? Or LH MTR / Double Top? Emini Retest of the March High
  • This week’s Emini candlestick was a follow-through bull bar with a small tail above.
  • Last week, we said that the market could still be in the sideways to up pullback phase. Traders should be open to the possibility of a second leg sideways to down after the current pullback. 
  • The bulls have a strong rally in the form of a tight bull channel. 
  • They hope that the rally will lead to months of sideways to up trading after a pullback (broad bull channel).
  • They want a strong retest of the March 21 high followed by a strong breakout above, starting the larger bull channel phase.
  • At the very least, they hope to get a retest of the prior trend extreme high (Mar 21), even if it only leads to a lower high (thereby forming a lower high major trend reversal).
  • If the market trades lower, they want the pullback to form a double bottom bull flag with April 19 low and the 20-week EMA to act as support. 
  • The bears got a reversal from a higher high major trend reversal, a large wedge pattern (Feb 2, July 27, and Mar 21) and a final flag reversal (ioi pattern in March).
  • They hope to get a TBTL (Ten Bars, Two Legs) pullback of at least 5-to-10%. They want at least a test of the 20-week EMA.
  • The selloff has retraced more than 5% and has tested the 20-week EMA.
  • The bears want at least a small second leg sideways to down after the current pullback, even if it forms a higher low.
  • They want a reversal from a lower high major trend reversal or a double top with the March 21 high.
  • Since this week’s candlestick is a bull bar closing in its upper half, it is a buy signal bar for next week.
  • The market could still be in the sideways to up pullback phase. 
  • However, traders should be open to the possibility of a second leg sideways to down after the current pullback.
  • For now, traders will see if the bulls can create another strong follow-through bull bar retesting the March 21 high or will the market start to stall followed by a second leg sideways to down.
  • Traders will see if the 20-week EMA will continue to act as support if the market retests it in the weeks ahead.

The Daily S&P 500 Emini chart

Emini Daily: Retest High, LH MTR, DT Bear Flag, or BO?
  • The market gapped up on Monday and traded sideways to up for the week. Friday opened higher but reversed to close with a bear body.
  • Previously, we said that the selloff was strong enough for traders to expect at least a small second leg sideways to down after a pullback. Traders will also see if there will be at least a small retest of the prior high (Mar 21).
  • The bears got a reversal from a higher high major trend reversal, a large wedge pattern (Feb 2, July 27, and Mar 21) and a final flag reversal (first half of March). 
  • They see the current move simply as a retest of the prior high and want a reversal from a lower high major trend reversal or a double top (with the March 21 high).
  • They want at least a small second leg sideways to down, even if it only forms a higher low.
  • The bulls got a strong rally which lasted over 5 months.
  • They hope that the current rally will form a spike and (broader) channel which will last for many months after a deeper pullback.
  • They hope to get at least a small retest of the prior high (Mar 21) followed by a breakout above. The pullback so far reached within 0.5% of the all-time high.
  • The bulls will need to create a strong breakout with follow-through buying to increase the odds of a resumption of the trend.
  • If the market trades lower, they want a reversal from a double bottom bull flag (with Apr 19) and a higher low.
  • For now, traders will see if the market will start to stall around the all-time high area. If it does, the odds of at least a small second leg sideways to down will increase.
  • The move up to retest of the March 21 high is strong with bull bars closing near their highs and gaps. 
  • Some traders may be doubting the strength of the bears expecting the worst case to be trading range and not a reversal of the bull trend. 
  • If the second leg sideways to down forms, traders will see the strength of the move. 
  • If it is strong with big consecutive bear bars closing near their lows and breaking far below the 20-day EMA, that will increase the odds of the market retesting and possibly breaking below the April 19 Low.
  • If the second leg sideways to down is weak (overlapping candlesticks, doji(s), and bull bars), traders will use the (second leg sideways to down) retest of the April 19 low as an opportunity to buy instead.
  • The selloff previously was strong enough for traders to expect at least a small second leg sideways to down after the current pullback.

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