Market Overview: S&P 500 Emini Futures
The market remains Always In Long with the Emini slightly climactic. The bears have not been able to create strong follow-through selling since the March low. They will need to create consecutive bear bars to increase the odds of a deeper pullback. The bulls want any pullback to be shallow and weak (with overlapping bars, doji(s) and bull bars).
S&P500 Emini futures
The Weekly S&P 500 Emini chart
- This week’s Emini candlestick was a bull bar with a long tail above.
- Last week, we said that odds continue to slightly favor the market to be in the sideways to up phase and a minor pullback can begin within a few weeks.
- While this week traded higher, it has the look of a reversal bar, closing below the middle of the candlestick.
- The bulls got a strong leg up creating a large wedge pattern (Dec 13, Feb 2, and Jul 19).
- They want a breakout trading far above the August high followed by a measured move using the height of the 6-month trading range which will take them to the March 2022 high area.
- The bulls got follow-through buying this week, and the move up since March is in a tight bull channel.
- Odds continue to slightly favor the market to be Always In Long.
- However, the move up has lasted a long time (4 months) and is slightly climactic.
- The market may need to trade sideways to down to work off the overbought condition.
- The bulls want any pullback to be shallow and weak (with overlapping bars, doji(s) and bull bars).
- The bears want a reversal down from a wedge pattern (Dec 13, Feb 2, and Jul 19) and a trend channel line overshoot.
- They hope to get a failed breakout above the August high. If there is a failed breakout, it would usually occur within 5 bars after the breakout.
- They also see a smaller wedge forming in the last few weeks (Jun 16, Jun 30, and Jul 19).
- At the very least, they want a larger pullback from the trend channel line overshoot.
- The problem with the bear’s case is that they have not been able to create strong follow-through selling since the March low.
- They will need to create consecutive strong bear bars closing near their lows to convince traders that a deeper pullback could be underway.
- Since this week’s candlestick closed below the middle of the range, it is a sell signal bar albeit weaker.
- The bears need to create strong follow-through selling to convince traders that they are back in control.
- If there is a pullback, odds slightly favor at least a small second leg sideways to up to retest the current leg high (July 19).
The Daily S&P 500 Emini chart
- The Emini traded higher earlier in the week and pulled back slightly on Thursday and Friday.
- Last week, we said that traders will see if the market continues the climactic move up or will a pullback phase begin soon.
- The bulls want a measured move up using the height of the 6-month trading range which will take them near the March 2022 high.
- They will need to break far above the August high with follow-through buying to increase the odds of reaching the measured move target.
- The move up since March 13 low is in a tight bull channel which means strong bulls.
- However, it has also lasted a long time and is slightly climactic. A minor pullback can begin at any moment.
- If there is a deeper pullback, odds slightly favor at least a small sideways to up leg to retest the current leg high (Jul 19).
- The bears have not yet been able to create credible selling pressure.
- They want a failed breakout above the August high and a reversal from a trend channel line overshoot. They also see a smaller wedge forming (Jun 30, Jun 16, and July 19).
- They will need to create consecutive bear bars closing near their lows, trading far below the 20-day exponential moving average to increase the odds of a deeper pullback.
- If there is a pullback, it would usually last at least TBTL (Ten Bars, Two Legs).
- While the market continues to slightly favor sideways to up, the move up has lasted a long time and is slightly climactic.
- The market may need to trade sideways to down for a few weeks to work off the recent overbought condition. A minor pullback can begin within a few weeks.
- Traders will see if the bears can create follow-through selling next week. If they do, it could be the start of the minor pullback phase.
Trading room
Al Brooks and other presenters talk about the detailed Emini price action real-time each day in the BrooksPriceAction.com trading room. We offer a 2 day free trial.
Market analysis reports archive
You can access all weekend reports on the Market Analysis page.
