Emini Big Bear Bar Closing near Low

Market Overview: S&P 500 Emini Futures

The S&P 500 Emini futures gapped down and closed as a follow-through Emini big bear bar near the low on weekly chart. It is a sign of strength by the bears. Bears want this to be the start of the bear leg testing June low. They want consecutive bear bars closing near the lows like the one in April. Bulls want at least a small second leg sideways to up testing August high.

S&P500 Emini futures

The Weekly S&P 500 Emini chart

• This week’s Emini candlestick was a big bear bar closing near the low, below the 20-week exponential moving average.
• Last week, we said that this week may gap down at the open, however, small gaps usually close early. The bears will need to create a follow-through bear bar to increase the odds of a re-test of the June low. 
• This week gapped down, and the gap remained open. The bears got a strong bear follow-through bar. It is a sign of strength by the bears.
• The bears want the Emini to reverse lower around the May 4 high, or the major bear trend line, followed by a re-test of the June low.
• They want a strong leg down like the one in April. The bears will need to create consecutive bear bars closing near their lows, to increase the odds of a retest of the June low.
• They see the current rally as a deep pullback in a broad bear channel. The bears see a wedge bear flag (June 28, July 29 and Aug 16), but the move up is in a tight bull channel.
• We have said that because of the strong move up, the bears will need at least a micro double top, or a strong reversal bar before they would be willing to sell aggressively.
• The bears got a reversal bar last week, with follow-through selling this week.
• The bulls want a second leg sideways to up after a pullback. They want a retest of the all-time high.
• The move up from June 17 low is in a tight channel. That means persistent buying. 
• The bulls will need to close far above the bear trend line to increase the odds of a retest of the all-time high.
• Since this week was a bear bar closing near the low, it is a good sell signal bar for next week. Next week may gap down at the open, however, small gaps usually close early.
• However, if next week gaps down and the gap remains open again, that indicates that the selling pressure is very strong, increasing the odds of a retest of June low.
• For now, odds are the Emini is still in the sideways to down pullback phase.
• The prior move up was strong enough for traders to expect at least a small second leg sideways to up after the pullback.
• However, if the bears start getting consecutive bear bars closing near their lows, the odds of a retest of the June low, and a 3^rd leg down of a larger wedge pattern, may be forming. 

The Daily S&P 500 Emini chart

• The Emini gapped down on Monday and closed below the 20-day exponential moving average. Thursday traded higher but did not close the gap. The bears got the second leg down on Friday.
• Last week, we said that the pullback may have started or after a micro double top, which means another small leg up to test Aug 16 high. The first target for the bears is the 20-day exponential moving average. 
• The bulls got a reversal higher from a trend channel line overshoot and a wedge bottom (Feb 24, May 20 and June 17).
• They want a continuation higher from a higher low major trend reversal after a pullback. At the very least, they want a second leg sideways to up to retest August 16 high.
• Bears want a reversal lower from around the May 4 high or around the bear trend line. They then want to retest the June low, followed by a breakout and measured move down.
• There is a wedge pattern (July 22, Aug 3, and Aug 16) since the rally on July 14. 
• The move up was in a tight bull channel. It increases the odds of at least a small second leg sideways to up after a larger pullback. 
• However, if the bears start getting consecutive bear bars closing near the lows, following last Friday’s big bear bar, the Emini may have started the bear leg to retest the June low.
• Since Friday was a big bear bar closing near the low, it is a good sell signal bar for Monday. It may gap down at the open, but small gaps usually close early.
• The next targets for the bears are the July 22 high or the June 28 high area.
• For now, the Emini should still be in the sideways to down pullback phase.
• Traders expect at least a small sideways to up retest of August high after this pullback is over.
• If the bears start getting consecutive bear bars closing near their lows, the odds of a retest of the June low, and a 3^rd leg down of a larger wedge pattern may be underway.

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