Market Overview: S&P 500 E-mini Futures
The S&P 500 E-mini futures broke below the prior week’s bull inside bar but reversed to close near the high. It is likely an E-mini failed breakout from the ii (inside-inside) pattern. Bulls want a reversal higher from a wedge bottom and a trend channel line overshoot. They want at least another leg higher from a higher low major trend reversal. Bulls will need to create consecutive bull bars closing far above the June 28 high to increase the odds of a test of the June 2 high.
S&P500 E-mini futures
The Weekly S&P 500 E-mini chart
- This week’s E-mini candlestick was bear doji with a long tail below.
- Last week, we said that odds slightly favor sideways to up and if the week trades below last week’s low, the prominent tails below the last 2 candlesticks increases the odds that there will be buyers below.
- This week traded lower and broke below the lows of the prior 2 candlesticks on Thursday but reversed up to close near the high of the week.
- Bulls failed to create a consecutive bull bar, something they have failed to do since March.
- Bulls want a reversal higher from a trend channel line overshoot, and a wedge bottom (Feb 24, May 20 and June 17).
- Bulls see this week as a failed breakout below the inside bar.
- They want next week to trade above this week’s high and trigger the High 2 bull entry. They want a reversal higher from a higher low major trend reversal.
- Bears want the E-mini to stall at Bear trend line or the 20-week exponential moving average, or around or below the June 2 high.
- They want a reversal lower from a double top bear flag with June 28.
- They then want a breakout below the June low and a continuation of the measured move down to 3600, or lower around 3450, based on the height of the 12-month trading range starting from May 2021.
- This week closed near the high of the week and had a long tail below. It is a weak sell signal bar for next week. It is an average buy signal bar for next week.
- In the last 4 weeks, Bears are not getting consecutive bear bars (follow-through selling) like those from April to June. Bear bars have prominent tails below and Bull bars have closes near the highs.
- We have said that the trend channel line overshoot increases the odds of a 2-legged sideways to up pullback. The E-mini is likely still in the pullback phase.
- There is a micro wedge on June 30, July 5 and July 14. After 3 failed tries to re-test the June low, the E-mini may start to do the opposite instead.
- Odds slightly favor sideways to up and a test of Bear trend line, and after that, near the June 2 high.
The Daily S&P 500 E-mini chart
- The E-mini gapped down on Monday and continue to trade lower. Thursday broke below the prior 2 candlestick lows but reversed to close near the high. Friday gapped up and closed as a small bull bar at the high above the 20-day exponential moving average.
- Last week, we said that odds slightly favor higher prices. Traders will monitor whether Bulls can create consecutive bull bars breaking far above Bear trend and test the June 2 high.
- This week, the E-mini reversed lower from the 20-day exponential moving average and just below Bear trend line.
- Bears want a reversal lower from a double top bear flag (June 28 and July 8.
- They then want a break below the June low followed by a continuation of the measured move down to around 3600 based on the height of the 9-month trading range or lower, around 3450 based on the height of the 12-month trading range starting with May 2021.
- Bulls want a failed breakout below the May low.
- They want a reversal higher from a trend channel line overshoot and a wedge bottom (Feb 24, May 20 and June 17).
- They see this week as a double bottom higher low major trend reversal.
- Bear trend line and 20-day exponential moving average remain resistances above. Bulls will need to break above these resistances with consecutive bull bars closing near their highs.
- In the last 4 weeks, Bear bars are getting smaller with weak follow-through selling. That means a reduction of selling pressure, at least temporarily.
- However, Bulls will need to break through the resistances above to test June 2 major lower high soon. If the E-mini trades slightly higher but continues to stall around the 20-day exponential moving average or Bear trend line, odds are Bears will return to sell the lower high for a retest of the June low within 1 to 3 weeks.
- For now, odds slightly favor sideways to up for next week.