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E-mini Overlapping Candlesticks

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Market Overview: S&P 500 E-mini Futures

The weekly chart is forming E-mini overlapping candlesticks indicating two-sided trading. Bears will need consecutive bear bars closing near their lows to show they are in control. Bulls want a retest and breakout above the October 29 high, followed by a resumption of the trend from a double bottom bull flag (Oct 10 and Nov 7).

S&P500 E-mini futures

The Weekly S&P 500 E-mini chart

E-mini Weekly - Overlapping Candlesticks, Bears Need FT, E-mini Overlapping Candlesticks
  • This week’s E-mini candlestick was an inside bear bar closing around the middle of its range, with long tails.
  • Last week, we said traders would watch if bears could create sustained follow-through selling — something they haven’t done since April — or if the pullback would again lack follow-through selling (overlapping candlesticks).
  • Bears failed to get strong follow-through selling, and the market formed another overlapping candlestick. However, this is the first streak of 3 consecutive bear bodies since February, showing slightly more two-sided trading since the April low.
  • Bears want a reversal from a wedge top (May 19, Jul 31, Oct 29).
  • They see the recent 6-week trading range as a possible final flag in the rally and want a pullback to the October 10 low area or the 20-week EMA.
  • They are looking for a TBTL (Ten Bars, Two Legs) pullback lasting a few weeks.
  • If the market trades higher, they want it to stall around the October 29 high area, forming a double top.
  • They will need consecutive bear bars closing near their lows to show they are in control.
  • Bulls broke above the 6-week trading range, reaching and exceeding the 6,900 round number target in October.
  • They see the current move as a pullback and want it to remain weak, with limited follow-through selling, like all recent pullbacks — and so far, that remains the case.
  • They want the October 10 low and the 20-week EMA to act as support.
  • They want a retest and breakout above the October 29 high, followed by a resumption of the trend from a double bottom bull flag (Oct 10 and Nov 7).
  • The move up since the Apr 21 low has been a tight bull channel, indicating persistent buying pressure.
  • The rally is slightly climactic and overbought; it may need to form a pullback before pushing higher. The pullback phase is underway, but not particularly strong.
  • Bears still need strong consecutive bear bars before traders will sell aggressively.
  • The lack of strong follow-through selling this week shows bears are not yet strong.
  • Traders will watch if bears can finally create strong follow-through selling — something they haven’t managed since April.
  • Or will the pullback continue to lack follow-through selling (overlapping bars), followed by a retest and breakout into a new all-time high in the weeks ahead?
  • For now, odds slightly favor the pullback being minor.

The Daily S&P 500 E-mini chart

E-mini Daily - DB BF, Wedge BF, Bears Want Lower High MTR
  • The market gapped up above the 20-day EMA on Monday, followed by sideways to up trading in the first half of the week. Thursday traded lower, closing below the 20-day EMA. Friday gapped down to retest the November 7 low but reversed to close as a bull bar with a prominent tail above.
  • Last week, we said traders would watch whether bears could create more follow-through selling. If the market traded higher, traders would watch whether the move formed a lower high followed by a second leg sideways to down.
  • The market traded higher, forming a lower high and then a second leg sideways to down.
  • Bulls reached and exceeded the 6,900 round number target in October.
  • They see the current move as a pullback within the bull trend and want it to remain weak and sideways (overlapping candlesticks, dojis, long tails below).
  • They want the October 10 low or the bull trend line to act as support.
  • They want a retest and breakout above the October 29 high, followed by a resumption of the trend from a wedge bull flag (Oct 10, Nov 7, Nov 14) and a double bottom bull flag (Nov 7 and Nov 14).
  • They hope the two-legged pullback has eased the recent overbought conditions.
  • Bears want a reversal from a large wedge pattern (May 19, Jul 31, Oct 29) and a lower-high major trend reversal (Nov 12).
  • If the market trades higher, bears want it to stall around the November 12 high, forming a double top bear flag.
  • They must create strong consecutive bear bars closing near their lows, trading far below the 20-day EMA and the October 10 low, to signal control.
  • The move from the April 21 low remains a tight bull channel, showing a strong trend.
  • The moves since September have more overlapping ranges despite new all-time highs — a sign of more two-sided trading and loss of momentum.
  • The market is slightly overbought and climactic, but without strong consecutive bear bars, traders will not sell aggressively.
  • Traders will watch whether bears can create more follow-through selling. If the market trades higher, they will see if the move stalls around the November 12 high and forms a double top bear flag, followed by another sideways-to-down leg.
  • Or will the pullback continue to lack strong follow-through selling, leading to a strong retest of the October 29 high in the weeks ahead instead?
  • For now, odds slightly favor the pullback being minor.

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