Weekly Emini Strong Reversal

Market Overview: S&P 500 Emini Futures

The market formed a weekly Emini strong reversal on the weekly chart. The bulls want a retest of the December 6 high and a breakout into new all-time highs. The bears hope the market will form a lower high major trend reversal or a double top with the December 6 high.

S&P500 Emini futures

The Weekly S&P 500 Emini chart

• This week’s Emini candlestick was a bull bar closing near its high with a prominent tail below, closing above the 20-week EMA.
• Last week, we said traders would see if the bulls could create a more follow-through bull bar closing above the 20-week EMA, or if the market would stall around the 20-week EMA, followed by another leg down instead.
• The market gapped up following the U.S.–China tariff talks over the weekend and traded up for the week.
• The bulls got a strong reversal in a tight bull channel.
• They see the selloff (Apr 7) forming a major higher low and the market being in a broad bull channel.
• They hope that the strong selloff has alleviated the prior overbought condition. They want a resumption of the trend.
• They got a reversal from a higher low major trend reversal (Apr 21).
• They hope the market has flipped into Always In Long.
• They want a retest of the December 6 high and a breakout into new all-time highs.
• The bears got a large 2-legged selloff (Apr 7).
• They see the current move as a retest of the prior trend’s extreme high (Dec 6).
• They hope the market will form a lower high major trend reversal or a double top with the December 6 high.
• They must create strong bear bars to show they are back in control.
• So far, the buying pressure since the April 7 low has been stronger (strong bull bars closing near their highs) than the weaker selling pressure (bear bar with limited follow-through selling).
• The market likely has flipped into Always In Long.
• If there is a pullback, odds slightly favor it to be minor, followed by at least a small sideways to up leg to retest the current leg extreme high (now May 16).
• Since this week’s candlestick closed near its high, the market may gap up on Monday. Small gaps usually close early.
• Traders will see if the bulls can create a more follow-through buying to retest the all-time high area.
• Or will the market start to stall, forming a minor pullback instead?

The Daily S&P 500 Emini chart

• The market gapped up on Monday (following U.S.–China tariff talks) and traded up for the rest of the week.
• Last week, we said traders would see if the bulls could create more bull bars closing above the 200-day EMA and testing near the March 25 high, or if the market would stall, followed by another leg down to test near the April 21 low instead.
• The bulls got a strong reversal trading above the 200-day EMA and the March 25 high.
• They see the market forming a major higher low (Apr 7) and want the broad bull channel to continue.
• They hope the selloff has alleviated the prior overbought condition and that the market has flipped into Always In Long.
• If there is a pullback, they want the 20-day EMA or the bull trend line to act as support.
• The bears see the current move as a retest of the prior extreme high (Dec 6).
• They want the market to form a lower high major trend reversal and a double top with the December 6 high.
• They see the rally from April 21 low as climactic and overdone.
• They want at least a minor pullback from a wedge pattern (Apr 9, May 2, and May 16).
• They must create strong consecutive bear bars to show they are back in control.
• So far, the buying pressure since the April 21 low is stronger (consecutive bull bars) than the weaker selling pressure (bear bars with no follow-through selling).
• The market likely has flipped into Always In Long.
• If there is a pullback, odds slightly favor it to be minor and favor at least a small sideways to up to retest the current leg high (now May 16).
• Traders will see if the bulls can continue to create more follow-through buying to retest the all-time high (Dec 6).
• Or will the market stall, forming a pullback to the 20-day EMA in the next few weeks ahead instead?

Trading room

Al Brooks and other presenters talk about the detailed Emini price action real-time each day in the BrooksPriceAction.com trading room. We offer a 2 day free trial.

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