Weekly Emini Minor Pullback

Market Overview: S&P 500 Emini Futures

The market is forming a weekly Emini minor pullback. The bulls must create consecutive bull bars closing near their highs to show they are back in control. The bears want the pullback to be weak and sideways (overlapping candlesticks, doji(s), bear bars, long tails above candlesticks).

S&P500 Emini futures

The Weekly S&P 500 Emini chart

• This week’s Emini candlestick was a bull doji closing around the middle of its range.
• Last week, we said the market could form a minor pullback within the next few weeks (a pullback could last 1-3 weeks). If a pullback begins but is weak (overlapping sideways, bear bars, doji(s), candlesticks with long tails above), the odds of another leg down will increase.
• The bulls see the market as being in a broad bull channel and want the pullback to form a higher low.
• They want a reversal from a parabolic wedge (Feb 28, Mar 7, and Mar 13).
• They want a retest of the all-time high (Dec 6) and a continuation of the trend.
• At the very least, they hope to get a retest of the 20-week EMA or the middle of the previous trading range.
• They must create consecutive bull bars closing near their highs to show they are back in control.
• They want the September or August lows to act as support.
• The bears got a reversal from a double top (Dec 6 and Jan 24), a lower high major trend reversal and a smaller double top (Jan 24 and Feb 19).
• The move down is in a 4-bar bear microchannel which means strong bears.
• They want a measured move based on the height of the 23-week trading range which will take them to the 5400 area. The March 13 low was about 100 points shy of the measured move.
• They see this week simply as a pullback. They want the pullback to be weak and sideways (overlapping candlesticks, doji(s), bear bars, long tails above candlesticks).
• If the market trades higher, they want the bear trend line, the January 13 low, or the 20-week EMA to act as resistance.
• The move down is strong enough for traders to expect at least a small sideways to down leg to retest the recent leg extreme low (Mar 13).
• The market is likely Always In Short.
• Because of the climactic selloff and parabolic wedge (Feb 28, Mar 7, and Mar 13), the market could form a minor pullback (a pullback could last 1-3 weeks). The pullback phase is currently underway.
• Traders will see the strength of the pullback. If it is weak (overlapping sideways, bear bars, doji(s), long tails above candlesticks), the odds of another leg down will increase.
• For now, odds slightly favor the pullback to be minor.

The Daily S&P 500 Emini chart

• The market traded sideways to up for the week. Tuesday traded lower but lacked follow-through buying. Friday gapped down but reversed to close near its high.
• Last week, we said the market may form a minor pullback (bounce) within a few weeks. If a pullback forms, traders will see the strength of the move.
• The market formed a minor pullback phase this week. While the move has a lot of overlapping candlesticks, the buying pressure is stronger (more prominent bull bars) compared with the weaker selling pressure (bear bar with no follow-through selling).
• The bulls see the market trading in a broad bull channel and want the move to form a higher low.
• They want a reversal from a parabolic wedge (Feb 28, Mar 4, and Mar 13) and a small double-bottom bull flag (Mar 18 and Mar 21).
• They want a TBTL (Ten Bars, Two Legs) pullback and the market to reverse above the 200-day EMA.
• The next targets for the bulls are the 20-day EMA and the January 13 low.
• They hope the September or August lows will act as support.
• The bears got a reversal from a lower high major trend reversal, a double top (Dec 6 and Jan 24), and a smaller double top (Jan 24 and Feb 19).
• They want a measured move (based on the height of the 23-week trading range) which will take them to around 5400. The March 13 low was about 100 points shy of the measured move.
• The move down was in a tight bear channel which means strong bears. The market likely has flipped into Always In Short.
• If the market trades higher, they want a wedge bear flag (with the first two legs being Mar 17 and Mar 19).
• They want the bear trend line, the 20-day EMA or the 200-day EMA to act as resistance, followed by a larger second leg sideways to down to retest the recent leg extreme low (Mar 13).
• The minor pullback phase began this week and could last at least half as long as the selloff (2-3 weeks).
• For now, the market could still be in the sideways to up pullback phase.
• Traders will see the strength of the move. If it is weak and sideways (overlapping candlesticks, doji(s), bear bars, long tails above candlesticks), the odds of another sideways to down leg will increase.
• If the bulls can create strong consecutive bull bars closing near their highs (big bull spike) instead, that could swing the odds in favor of the market to retest near the all-time high.
• Odds slightly favor at least a small second leg sideways to down to retest the current leg extreme low (Mar 13) after the pullback.

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