Market Overview: S&P 500 E-mini Futures
The weekly E-mini bears need strong follow-through selling breaking decisively below the 20-week EMA to indicate control. Bulls want the pullback to be weak and sideways, lacking follow-through selling, with overlapping candlesticks and prominent lower tails and the 20-week EMA to act as support.
S&P500 E-mini futures
The Weekly S&P 500 E-mini chart
- This week formed a bear bar closing near its low.
- Last week, we said traders would watch whether bulls could generate sustained follow-through buying to retest the all-time high, or whether the market would form a weak retest of the all-time high, followed by a second leg sideways to down in the weeks ahead.
- Bulls want a measured move to around 8000, based on the height of the initial spike (from the March 30 low to the April 17 high).
- Bulls see the current move as a two-legged pullback and want the June 9 low or the 20-week EMA to act as support, forming a double bottom bull flag.
- Bulls want the pullback to be weak and sideways, lacking follow-through selling, with overlapping candlesticks and prominent lower tails.
- Bulls hope the pullback has alleviated the recent overbought conditions and want a retest of the all-time high afterward.
- If the market trades lower, bulls want the April 23 low to act as support.
- Bears want a reversal from a trend channel line overshoot, followed by a test of the April 23 low, which marked the start of the bull channel, or a test of the bull trend line.
- Bears want a two-legged sideways-to-down pullback lasting several weeks. The move is currently underway.
- Bears need consecutive strong bear bars breaking decisively below the 20-week EMA to indicate strength. Without that, traders will be reluctant to sell aggressively.
- Previously, the market rallied in a strong spike-and-channel bull trend, breaking above the trend channel line.
- Failed breakouts above a trend channel line can lead to a test of the bull trend line.
- However, if the pullback remains mostly sideways, with overlapping candlesticks and prominent lower tails, it can indicate strong bulls and increase the odds of trend continuation after the pullback.
- Traders will watch whether bears can generate strong follow-through selling to test the 20-week EMA or the April 23 low area.
- Or will the pullback remain mostly sideways while holding above the 20-week EMA instead?
- For now, the current pullback is likely to remain minor.
The Daily S&P 500 E-mini chart
- The market gapped down on Tuesday, followed by sideways trading. Friday opened lower but had limited follow-through selling.
- Last week, we said traders would watch whether bears could create a second leg sideways to down to retest the June 9 low, even if it only formed a higher low, or whether the market would trade higher and make a new all-time high within the next few weeks.
- Bears want a reversal from a wedge top (May 1, May 14, and June 1) and a higher high major trend reversal (June 1).
- Bears want a failed breakout above the trend channel line, followed by a pullback to test the April 23 low area or the bull trend line.
- Bears see the June 15 move as a retest of the prior high and want a reversal from a lower high major trend reversal.
- Bears need consecutive strong bear bars to increase the odds of a deeper pullback.
- If the market trades higher, bears want the June 15 high to act as resistance and form a double top bear flag.
- Previously, bulls generated a strong spike-and-channel bull trend.
- Bulls want a measured move to around 8000, based on the height of the initial spike (from the March 30 low to the April 17 high).
- Bulls view the current move as a two-legged pullback and want the June 9 low to act as support, forming a double bottom bull flag.
- Bulls want the pullback to be weak and sideways, with overlapping candlesticks, bull bars, and prominent lower tails.
- Bulls hope the pullback has alleviated the recent overbought conditions and want a retest and breakout above the all-time high afterward.
- Bulls need consecutive strong bull bars to demonstrate control.
- The market is forming a two-legged sideways-to-down pullback.
- Traders will watch whether bears can create consecutive strong bear bars breaking decisively below the June 9 low.
- Or will the market stall around the June 9 low area, forming a double bottom bull flag followed by a move higher within the next few weeks instead?
- For now, the pullback is likely to remain minor, even if it lasts a few weeks.
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