Market Overview: S&P 500 Emini Futures
The S&P 500 Emini retested the December high following a 1 bar pullback on the weekly chart. The bulls want a breakout above the December 28 high and retest the all-time high. The bears want the market to stall around the December high area and form a Low 2 sell setup.
S&P 500 Emini Futures
- This week’s Emini candlestick was a bull bar closing near its high with a small tail above.
- Last week, we said that the market could still be in the pullback phase. Odds slightly favor the pullback to be minor and the market to still be Always In Long.
- This week’s candlestick opened higher and retested the December 28 High.
- Previously, the bulls got a strong rally in the form of a 10-bar bull microchannel with bull bars closing near their highs. That means strong bulls.
- Usually, traders expect buyers below the first pullback from such a strong bull microchannel. It was the case this time.
- The next target for the bulls is the all-time high. They want a strong breakout into new all-time high territory, hoping that it will lead to many months of sideways to up trading.
- The bears hope that the strong rally is simply a buy-vacuum test of what they believe to be a 37-month trading range high.
- They want a reversal from a higher high major trend reversal (with the July 27 high) or a lower high major trend reversal (with the all-time high).
- They also see a large wedge pattern (Feb 2, July 27, and December 28), a micro wedge (Dec 14, Dec 20, and Dec 28) and a small double top (Dec 28 and Jan 12).
- The problem with the bear’s case is that the rally is very strong.
- Traders would prefer a second entry (Low 2 sell setup) before they would be willing to sell more aggressively.
- If the market trades higher, the bears want it to stall around the December 28 high area, forming a bear bar with a long tail above.
- Since this week’s candlestick is a bull bar closing in the upper half, it is a buy signal bar for next week.
- Traders will see if the bull can create a follow-through bull bar and resume the move higher.
- For now, odds slightly favor the market to still be Always In Long.
