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Weekly Emini Big Pullback

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Market Overview: S&P 500 Emini Futures

The market formed a weekly Emini big pullback with a big bear bar testing the 20-week EMA. The bears need to create a follow-through bear bar to increase the odds of retesting the August low. The pullback is stronger than the bulls hoped it would be. They hope to get at least a small second leg sideways to up to retest the August 30 high.

S&P500 Emini futures

The Weekly S&P 500 Emini chart

Emini Weekly: LH MTR or Broad Bull Channel?, Weekly Emini Big Pullback
  • This week’s Emini candlestick was a big bear bar closing near its low and below the 20-week EMA.
  • Last week, we said that the pullback phase may have begun. 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 strong leg up will increase.
  • The bears managed to create a big bear bar testing the 20-week EMA.
  • They see the recent rally 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. They also see a micro double top (Aug 22 and Aug 30).
  • Since this week closed below the 20-week EMA, the bears need to create a follow-through bear bar to increase the odds of retesting the August low.
  • If the market trades higher, the bears want a reversal from a double top bear flag with the August 30 high.
  • The bulls got a strong retest of the all-time high.
  • They hope the market is in the broad bull channel phase and want a breakout into new all-time high territory.
  • If there is a pullback, the bulls want it to be weak and sideways (with doji(s), bull bars and overlapping candlesticks).
  • They see this week as a 50% pullback of the rally from the August low. The pullback is stronger than the bulls hoped it would be.
  • The bulls hope to get at least a small second leg sideways to up to retest the August 30 high.
  • They want the 20-week EMA or the bull trend line to act as support.
  • If the market gaps down on Monday, they want it reverse to close as a bull bar by the end of the week (like the week of the Aug 5 low)
  • Since this week’s candlestick is a big bear bar closing near its low, it is a sell signal bar for next.
  • Because the candlestick closed near its low, the market may gap down on Monday. Small gaps usually close early.
  • For now, odds slightly favor the market to remain in the sideways to down pullback phase.
  • Traders will see if the bears can create a follow-through bear bar. If they do, that will increase the odds of a retest of the August low.
  • Or will the 20-week EMA or the bull trend line act as support?
  • The odds slightly favor the market to have flipped into Always In Long and any pullback is likely minor.
  • However, if the bears continue to create consecutive bear bars closing near their lows, the odds of a retest of the August low will increase.

The Daily S&P 500 Emini chart

Emini Daily: DT Bear Flag & LH MTR, or Deep Pullback?
  • The market opened lower on Tuesday and traded sideways to down for the week.
  • Previously, we said that the move up from the August 5 low while strong, was slightly climactic. The market may need to form a small sideways-to-down pullback before it resumes higher.
  • The bears see the rally as a retest of the prior high.
  • They got a reversal from a lower high major trend reversal and a double top with the all-time high.
  • The current move (from Aug 30) is in the form of a 5-bar bear microchannel. That means persistent selling.
  • The bears hope to get at a retest of the August low even if it forms a higher low.
  • The bulls hope the rally is in a (broad) channel phase and want a resumption of the move.
  • They got a strong rally testing near the all-time high.
  • They hope that the market has flipped into Always In Long and want to get at least a small second leg sideways to up to retest the August high after the current pullback.
  • The bulls see the current move as a 50% pullback of the rally and want a reversal from a higher low major trend reversal.
  • The pullback is stronger than the bulls hoped it would be.
  • If the market gaps down on Monday, they want a reversal (like the one on August 5 low) from a parabolic wedge with the first two legs being (Sep 3 and Sep 6).
  • Since Friday was a bear bar closing near its low, it is a signal bar for Monday.
  • The odds slightly favor the market to remain in the sideways to down pullback phase.
  • The market may gap down next week. Small gaps usually close early.
  • Traders will see if the bears can continue to create more bear bars testing near the August 5 low.
  • Or will the market trade slightly lower but stall and form a pullback instead?
  • If there is a large gap down on Monday, traders will see if there will be a reversal from a parabolic wedge with the first two legs being (Sep 3 and Sep 6).

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