E-mini Bulls Need Follow-through Bull Bars

Market Overview: S&P 500 E-mini Futures

The S&P 500 E-mini bulls need follow-through bull bars on the weekly chart to increase the odds of retesting the all-time high. Bears see the current move as a pullback and a retest of the prior high and want it to be weak and sideways, with overlapping bars and prominent upper tails.

S&P500 E-mini futures

The Weekly S&P 500 E-mini chart

• This week’s candlestick is a bull bar closing near its high, with a small upper tail.
• Last week, we said traders expect a retest of the January 28 high, forming either a lower high or higher high. Traders would watch whether bulls could create a strong entry bar to test the 20-week EMA, or if the market continues lower toward the 6,200 measured move, extending the bear microchannel.
• Bulls got a strong entry bar closing above the 20-week EMA, testing the middle of the tight trading range.
• Bulls see the recent move as a deep pullback testing the December 6, 2024 breakout point and the August 1 low, and want these areas to hold as support.
• They see a 2-bar reversal and a trend channel line overshoot buy setup and want a retest of the all-time high.
• At a minimum, bulls want a two-legged sideways to up pullback lasting a few weeks.
• If the market trades lower, bulls want a higher low relative to the March 30 low, followed by at least a small second leg sideways to up.
• Bulls need follow-through buying to increase the odds of retesting the all-time high.
• Bears created a pullback breaking below the bull trend line.
• Bears see the current move as a pullback and a retest of the prior high and want it to be weak and sideways, with overlapping bars and prominent upper tails.
• Bears want it to form a lower high major trend reversal, followed by a second leg sideways to down.
• Bears want the 20-week EMA to act as resistance and for the market to reverse below it.
• If the market trades higher, bears want the February 25 high to act as resistance.
• The market recently broke below the bull trend line, but the candlesticks show large overlapping ranges with prior bars, indicating that bears are not yet decisively in control.
• Traders are watching the strength of the retest of the prior high — strong (consecutive bull bars closing near their highs) or weak (overlapping bars, prominent upper tails, and bear bars).
• If the market trades lower, traders will watch the strength of the move — will it be strong with consecutive bear bars closing near their lows, or will it be weak, forming a higher low relative to the March 30 low instead?

The Daily S&P 500 E-mini chart

• The market traded sideways early in the week, followed by a big gap up on Wednesday with follow-through buying on Thursday. Friday gapped up slightly but closed as a small bear bar.
• Previously, we said traders would watch whether bears could generate sustained follow-through selling or if the market would stall and begin forming bull bars, leading to a two-legged sideways to up pullback lasting 10 or more bars following the consecutive sell climaxes.
• Bears created a deep pullback in the form of a tight bear channel, breaking the bull trend line (not shown).
• Bears see the current move as a retest of the prior high and want it to form a lower high major trend reversal, followed by a larger second leg sideways to down.
• They want the move to be weak, with overlapping bars, bear bars, and prominent upper tails.
• Bears want the 50-day EMA or the bear trend line to act as resistance.
• If the market trades higher, bears want the February 25 high to act as resistance.
• Bears want a retest of the March 30 low, even if it only forms a higher low.
• Bulls want a retest of the all-time high, followed by a resumption of the bull trend.
• They got a reversal following the consecutive sell climaxes, a wedge pattern (March 13, March 20, and March 30), and a trend channel line overshoot.
• If the market trades lower, bulls want the 20-day EMA to act as support, followed by a second leg sideways to up.
• If the market retests the March 30 low, bulls want a higher low, forming a higher low major trend reversal.
• Bulls need sustained follow-through buying to increase the odds of a retest of the all-time high.
• The pullback to the March 30 low broke the major bull trend line.
• Traders expect a retest of the prior high, forming either a lower high or a higher high. The move is underway.
• Traders will watch the strength of the move—whether it is in a tight bull channel or with deep pullbacks and strong bear bars.
• If the move is strong, the odds of retesting the all-time high will increase; if the move has strong and prominent bear bars, the odds of a retest of the March 30 low increase.
• For now, traders will watch if bulls can create sustained follow-through buying breaking above the bear trend line.
• Or will the move stall around the bear trend line, followed by a retest of the March 30 low in the weeks ahead instead?

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