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Emini Two-legged Pullback

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Market Overview: S&P 500 Emini Futures

The weekly chart formed an Emini two-legged pullback testing near the February 2 breakout point. The bulls see the move simply as a pullback and want a retest of the July 27 high followed by a strong breakout above. The bears need to create follow-through selling following this week’s breakout below the ii (inside inside) pattern and close below the 20-week EMA.

S&P500 Emini futures

The Weekly S&P 500 Emini chart

Emini Weekly: 2nd Leg Down, Testing BO Point Emini Two-legged Pullback
  • This week’s Emini candlestick was a big bear bar closing near its low.
  • Last week, we said that the market may first break out below the inside bar and traders will see if the bears can get follow-through selling or will the market trade slightly lower but reverse to close with a long tail below or a bull body.
  • This week broke below the bear inside bar with strong selling and closed below the 20-week exponential moving average.
  • Previously, the bulls got a strong trend up (since March) in a tight bull channel. 
  • The bulls hope to get a larger second leg sideways to up after the current pullback.
  • They want a reversal up from a double bottom bull flag (Aug 18 and Sept 22) and the Emini to reverse back above the 20-week exponential moving average.
  • They want a retest of the July 27 high followed by a strong breakout above.
  • The bears got a two-legged pullback testing near the breakout point (Feb 2).
  • This week broke out below the ii (inside inside) pattern and closed below the 20-week EMA. The bears need to create follow-through selling to increase the odds of a reversal.
  • Since this week’s candlestick was a big bear bar closing near its low, it is a sell signal bar for next week.
  • The market may gap down on Monday. Small gaps usually close early.
  • For now, odds slightly favor the Emini to trade at least a little lower.
  • Traders will see if the bears can create follow-through selling or will the market trade slightly lower but reverse up with a long tail below or a bull body.
  • While the Emini could still trade a little lower, odds slightly favor the market to still be Always In Long.

The Daily S&P 500 Emini chart

Emini Daily: Still PB Mode, 2nd Leg Down, Test BO Point
  • The Emini traded lower and closed below the August 18 low this week. Friday was a follow-through bear bar.
  • Last week, we said that odds slightly favor the market to still be in the sideway to down pullback phase and to trade at least a little lower early the week.
  • The bears got a reversal from a climactic move and a wedge pattern (Dec 13, Feb 2, and Jul 27).
  • They want a second leg sideways to down from a lower high major trend reversal and a double top bear flag (Sept 1 and Sept 14). They got that this week.
  • They want a deeper pullback, testing the February 2 high which was the breakout point of the recent rally.
  • They will need to create consecutive bear bars closing near their lows, trading far below the August 18 low to increase the odds of a reversal down.
  • The selloff from September 14 is in a tight bear channel. It increases the odds of at least a small second leg sideways to down after a small pullback.
  • The bulls want a reversal up from a double bottom bull flag (Aug 18) followed by a retest of the July 27 high and a strong breakout above.
  • They see the current move simply as a two-legged pullback.
  • If the market trades lower, the bulls want a reversal up around the February 2 high, which was the breakout point of the recent rally.
  • Since Friday was a small bear bar closing near its low, it is a sell signal bar for Monday.
  • The market may gap down on Monday. Small gaps usually close early.
  • For now, the market may still be in the sideways-to-down pullback phase.
  • Traders will see if the bears can create follow-through selling or will the market trade slightly lower but find buyers around the February 2 high area.
  • While the Emini could still trade a little lower, odds slightly favor the market to still be Always In Long.

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