Market Overview: S&P 500 Emini Futures
The S&P 500 Emini futures triggered the H2 buy signal on the weekly chart. The bulls need to create a follow-through bull bar to increase the odds of higher prices.
Bears want a reversal lower from a double top bear flag with Oct 5 high or around the bear trend line. The Emini is forming a small trading range around the June low between 3500 and 3800. Traders will BLSH (Buy Low, Sell High) until there is a breakout from either direction.
S&P500 Emini futures
The Weekly S&P 500 Emini chart
- This week’s Emini candlestick was a bull bar closing near the high.
- Last week, we said that the Emini may see some sideways trading price action around the June low between 3500 and 3800.
- This week gap up and traded higher, closing above last week’s high.
- The bears got a tight bear channel down testing the June low. That means strong bears.
- The bears failed to get follow-through selling below the June low for the second time.
- The bears hope that the current sideways trading range is simply forming a double top bear flag (Oct 5).
- They want another leg down forming the 3rd leg of the wedge from the August selloff.
- The bears want a strong breakout below June low and measured move down to around 3450 or the big round number 3400 which is also 2020 high.
- If the Emini trades higher, the bears want a reversal lower from a lower high around the October 5 high or the bear trend line, or the 20-week exponential moving average.
- The bulls want a reversal higher from a lower low major trend reversal with the June low and a wedge bottom (Feb 24, June 17 and Oct 13) with a nested wedge (Sept 6, Sept 30 and Oct 13).
- Because of the strong selloff, the bulls will need a strong reversal bar or at least a micro double bottom before they would be willing to buy aggressively.
- Last week was a weak reversal bar. Bulls triggered the High 2 signal this week and had a strong entry bar closing near the high.
- Next week, they will need to create a follow-through bull bar to increase the odds of higher prices.
- The bulls need to create consecutive bull bars closing near their highs, trading far above the bear trend line and 20-week exponential moving average, to convince traders that a reversal higher may be underway.
- The problem with the bull’s case is that the recent selloff was very strong. The sideways to up leg may only lead to a lower high.
- Since this week was a bull bar closing near the high, it is a buy signal bar for next week. The Emini may gap up on Monday, but small gaps usually close early.
- Traders will see whether the bulls can get a follow-through bull bar or fail to do so.
- For now, odds slightly favor the Emini to trade at least slightly above this week’s high.
- The Emini is forming a small trading range around the June low between 3500 and 3800. Traders will BLSH (Buy Low, Sell High) until there is a breakout from either direction.
The Daily S&P 500 Emini chart
- The Emini gapped up on Monday and again on Tuesday but closed as a bear bar with a prominent tail below. Thursday formed an outside bear bar below the 20-day exponential moving average.
- Friday traded below Thursday’s low but reversed into an outside bull bar closing near the high. There is now an OO (outside-outside) pattern which is a breakout mode.
- Last week, we said the Emini is currently forming a small trading range around the June low between 3500 to 3800 and we may continue to see more sideways trading range price action until a strong breakout from either direction.
- The bulls see the strong selloff simply as a sell vacuum testing June low within a trading range.
- They want a reversal higher from a lower low major trend reversal with the June low and a wedge bull flag (Feb 24, June 17 and Oct 13). They also have a nested wedge (Sept 6, Sept 30 and Oct 13).
- They also see the current pullback (Oct 21) as a higher low major trend reversal setup.
- The bulls will need to create consecutive bull bars closing near their highs to convince traders that a reversal higher may be underway.
- The problem with the bull’s case is that the selloff from August 16 was very strong. Sideways to up pullbacks may only lead to a lower high.
- This week formed a micro wedge bull flag around the 20-day exponential moving average. Bulls want at least a second leg sideways to up testing Oct 5 high or the September 21 high.
- The bears want a strong breakout below the June low followed by a measured move down to 3450 or slightly lower around the 3400 big round number which is also the 2020 high.
- They see the current sideways pullback simply as a double top bear flag (with Oct 5) and want at least another leg down forming the wedge pattern with the first two legs being September 6 and September 30.
- If the Emini trades higher, the bears want a reversal lower from a double top bear flag with October 5 high or September 21 high, or the 20-day exponential moving average or around the bear trend line.
- The bear trend line remains as resistance above.
- The Emini is currently forming a small trading range around the June low between 3500 and 3800.
- We may continue to see more sideways trading range price action until a strong breakout from either direction.
- Since Friday was a bull bar closing near the high, it is a buy signal bar for Monday.
- Bulls want to trigger the OO (outside-outside) pattern by trading above Friday’s high. Odds favor at least slightly higher prices next week.
- Traders will see if the bulls can break far above 3800 and the bear trend line with consecutive bull bars closing near their highs, or fail to do so and reverses lower from a double top bear flag with Oct 5 high or September 21 high.
Trading room
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