Emini Bear Inside Bar

Market Overview: S&P 500 Emini Futures

The weekly chart formed an Emini Bear Inside Bar which means the market is in breakout mode. The bears want a breakout below while the bulls want a breakout above the inside bar. The first breakout from an inside bar can fail 50% of the time. Sometimes, the candlestick after an inside bar is another inside bar, forming an ii (inside inside) which is a breakout mode pattern.

S&P500 Emini futures

The Weekly S&P 500 Emini chart

• This week’s Emini candlestick was an inside bear bar with a prominent tail below.
• Last week, we said that odds slightly favor the market to trade at least a little higher and likely still Always In Long.
• The market traded sideways to down for the week and closed in the lower half.
• Previously, the bulls got a strong trend up (since March) in a tight bull channel. 
• That increases the odds of at least a second leg sideways to up after a pullback. The second leg sideways to up may still be underway.
• They hope that this week was simply a pullback and want a breakout above the bear inside bar.
• The bulls want a retest of the July 27 high followed by a strong breakout above.
• The next targets for the bulls are the March 2022 high area and the all-time high.
• If the market trades lower, they want a reversal up from around the 20-week exponential moving average or from a double bottom bull flag with the August 18 low.
• Previously, the bears got a pullback from a climactic move and tested the 20-week exponential moving average.
• They want another leg down from a lower high major trend reversal.
• They will need to create follow-through selling trading far below the 20-week exponential moving average to increase the odds of a deeper pullback.
• Since this week’s candlestick was an inside bar, the market is in breakout mode. The bulls want a breakout above while the bears want a breakout below the inside bar.
• Because it is a bear bar closing in the lower half, the market may first break out below the inside bar.
• The first breakout from an inside bar can fail 50% of the time.
• Sometimes, the candlestick after an inside bar is another inside bar, forming an ii (inside inside) which is a breakout mode pattern.
• While the Emini could still trade a little lower, odds slightly favor the market to still be Always In Long.

The Daily S&P 500 Emini chart

• The Emini traded sideways to down earlier in the week. Thursday gapped down but reversed into a bull bar with some follow-through buying on Friday albeit weaker.
• Previously, we said that odds favor at least a small retest of the prior leg’s extreme high (Jul 27) after the current pullback.
• The bears got a reversal from a climactic move and a wedge pattern (Dec 13, Feb 2, and Jul 27).
• They want a second leg sideways to down from a lower high major trend reversal. It is currently underway.
• They hope that Thursday and Friday were simply a small pullback and want another strong leg down testing the August 18 low.
• They will need to continue creating strong bear bars closing near their lows, trading far below the August 18 low to increase the odds of a reversal down.
• The bulls want a reversal up from a higher low major trend reversal followed by a retest of the July 27 high and a strong breakout above.
• If the market trades lower, they want a reversal up from a double bottom bull flag with the August 18 low.
• A pullback from a trend would usually last at least TBTL (Ten Bars, Two Legs). The current pullback which started from July 27 has fulfilled the minimum requirement.
• Since Friday was a bull bar doji closing in the lower half of its range, it is a sell signal bar for Monday.
• Traders will see if the bears can create follow-through selling or will the market trade slightly lower but find buyers near the August 18 low area.
• For now, while the Emini could still trade a little lower, odds slightly favor the market to still be Always In Long.

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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