Market Overview: S&P 500 E-mini Futures
The S&P 500 E-mini market formed a weekly weak pullback to the 20-week EMA. The bulls want a breakout into new all-time highs followed by a measured move based on the height of the recent 20-week trading range. The bears must do more to show that they are back in control.
S&P 500 E-mini Futures
The Weekly S&P 500 E-mini Chart
- This week’s E-mini candlestick was another bull bar closing above the middle of its range with a long tail above.
- Last week, we said that traders would see if the bulls could create more follow-through buying breaking into new all-time territory, or if the market would stall around the upper third of the trading range followed by a bear leg instead.
- The market opened lower around the 20-week EMA but traded sideways to up for the week. The market traded off its high on Friday.
- The bulls see the market as being in a broad bull channel and want the market to continue sideways to up for months.
- They see the recent move (to Jan 13) as a two-legged pullback and want the market to resume higher from a double bottom bull flag (Nov 4 and Jan 13).
- They see the last two weeks as a pullback and want at least another sideways to up leg (the first leg being the Jan 13 low to Jan 24 high move).
- They want a breakout into new all-time highs followed by a measured move based on the height of the recent 20-week trading range.
- They want the 20-week EMA to act as support.
- The bears got a two-legged pullback (Jan 13) but the follow-through selling below the 20-week EMA was limited.
- They see the recent move (Jan 24) as a retest of the prior trend extreme high (Dec 6) and a bull leg within the 20-week trading range.
- They want a reversal from a double top (Dec 6 and Jan 24) and a lower high major trend reversal.
- While the last two weeks traded slightly lower, both candlesticks had bull bodies. The bears are not yet as strong as they hoped to be.
- If the market trades higher, they want a failed breakout above the all-time high followed by a higher major trend reversal.
- Since this week’s candlestick is a bull bar closing above the middle of its range, it can be a buy signal bar for next week albeit weak (long tail above).
- The market remains in a 20-week trading range. The December 6 high could be an area of resistance.
- Traders buying here could be buying near the high of the 20-week trading range, which is not an ideal setup.
- Traders may BLSH (Buy Low, Sell High) within the trading range until there is a breakout from either direction with follow-through buying/selling.
- The buying pressure since the January 13 low is stronger than the selling pressure (all candlesticks have bull bodies).
- If this continues to be the case, we may see a retest of the all-time high followed by a breakout attempt within a few weeks.
- For now, traders will see if the bulls can create follow-through buying breaking into new all-time territory.
- Or will the market continue to stall around the upper third of the trading range followed by a bear leg instead?
The Daily S&P 500 E-mini Chart
- The market gapped down on Monday but reversed higher for the rest of the week. Friday traded higher but reversed into an outside bear bar.
- Previously, we said traders would see if the bulls could create more follow-through buying, breaking far above the all-time high or if the market would trade slightly higher but stall around the December 6 high area instead.
- The market traded sideways testing the upper third of the 20-week trading range twice (Jan 31 and Feb 7).
- The bulls see the market trading in a broad bull channel and want the move to continue for months. They want an endless pullback bull trend.
- They see the last two weeks as a pullback forming a double bottom bull flag (Jan 27 and Feb 3).
- They want a retest of the all-time high (Dec 6) followed by a trend resumption.
- If the market trades lower (such as gapping down on Monday), they want a reversal from a wedge bull flag (with the first two legs being Jan 27 and Feb 3).
- The bears want a reversal from a lower high major trend reversal and a double top.
- They see the market as being in a 20-week trading range. They hope to get a bear leg to retest the January 13 low followed by a breakout below.
- If the market trades higher, they want a failed breakout above the all-time high (Dec 6) and a reversal from a higher high major trend reversal.
- So far, the market is in a 20-week trading range.
- The buying pressure since the January 13 low is stronger (consecutive bull bars) compared with the weaker selling pressure (bear bars with limited follow-through selling).
- The bears need to do more to convince traders that they are back in control.
- If the market continues to trade sideways with limited follow-through selling, the odds will swing in favor of a breakout attempt above the all-time high within a few weeks.
- For now, traders will see if the bulls can create a retest and a breakout above the all-time high.
- Or will the market continue to stall around the upper third of the 20-week trading range followed by a bear leg testing the January 13 low instead?