Weekend Emini Consecutive Dojis

Market Overview: S&P 500 Emini Futures

The S&P 500 Emini futures weekly chart formed a pair of Emini consecutive dojis. There are often buyers below the first pullback from a strong channel up like the tight 8-bar bull micro channel. The bulls hope to get at least a retest of February high. The bears need to create strong follow-through selling next week to increase the odds of a test of the 20-week exponential moving average.

S&P500 Emini futures

The Weekly S&P 500 Emini chart

• This week’s Emini candlestick was bear doji closing above last week’s low.
• Last week, we said that while we may see some pullback, odds slightly favor the Emini to still be in the sideways to up phase.
• This week broke below last week’s low, ending the 8-bar bull micro channel streak.
• The bears see the current move up simply as a continuation of the move which started in October 2022.
• They want a reversal down from a higher high major trend reversal. If the Emini trades higher, they want a reversal lower from a double top with February 2 high.
• Because of the strong move-up, the bears will need a strong reversal bar or a micro double top before they would be willing to sell more aggressively.
• While some traders may view December high as a major lower high, the bears want a break above the August high to be sure of the end of the bear trend.
• The Emini consecutive dojis indicate the bears are not yet as strong as they would like to be.
• They need to create strong follow-through selling next week to increase the odds of a test of the 20-week exponential moving average.
• The bulls got a larger second leg sideways to up from the rally which started in October 2022.
• They see the last 6 months as forming an inverted head and shoulders, with the December low being the right shoulder.
• However, inverted head and shoulders pattern often end up as bear flags instead of a reversal pattern.
• They want another strong leg up completing the wedge pattern with the first two legs being January 17 and February 2.
• By breaking above the December high, they hope the bear trend of successively lower highs and lower lows has ended.
• They need to break far above the December high and August high to signal the end of the selloff. 
• The bulls had an 8-bar bull micro channel streak which was broken this week. There may be buyers below the first breakout below such a strong bull micro channel.
• However, if the bears continue to get consecutive bear bars, it could be the start of a deeper pullback.
• After the spike and broad channel down from January 2022, the Emini may have transitioned into a trading range phase between 4300 and 3500.
• The move up from October 2022 may simply be a bull leg within a trading range.
• Traders will see if the bears can get follow-through selling following this week’s breakout below the inside bar or will the bulls get a retest of the February 2 high within the next few weeks.

The Daily S&P 500 Emini chart

• The Emini traded sideways to up from Monday to Wednesday. Friday’s candlestick gap below the 20-day exponential moving average but reversed to close as a bull reversal bar near its high.
• Last week, we said until the bears can create strong consecutive bear bars, odds slightly favor the Emini to still be in the sideways to up phase.
• The bears see the move up from October simply as a 2-legged swing up and want a reversal down from a higher high major trend reversal.
• So far, the pullback has 3 pushes therefore a wedge (Feb 6, Feb 10 and Feb 17).
• The pullback has a lot of overlapping price action. The bears are still not yet strong.
• If the Emini trades higher, the bears want a reversal down from a lower high major trend reversal or a double top with February 2 high.
• The bears see the selloff from January 2022 as a broad bear channel, even though the Emini has traded slightly above the December high. 
• They need the Emini to trade far above the August high to believe the broad bear channel has ended.
• The bears need to create consecutive bear bars closing near their lows to convince traders that a deeper pullback is underway.
• The bulls got a larger second leg sideways to up from a double bottom bull flag (Nov 3 and Dec 22) and a higher low major trend reversal.
• They then got a breakout above December high but did not get sustained follow-through buying.
• By trading above the December high, the bulls hope that the broad bear channel has ended, and the market has either transitioned into a trading range or a bull trend.
• The bulls hope that the recent moves were simply a pullback and want at least another leg higher to retest February 2 high.
• They hope that the 20-day exponential moving average will act as support. 
• They need to break far above the December high and August high, to convince traders that the selloff from January has ended.
• Since Friday was a bull reversal bar closing near its high, it is a buy signal bar for next week.
• For now, until the bears can create strong consecutive bear bars, odds slightly favor the Emini to still be in the sideways to up phase.
• Monday is a trading holiday honoring George Washington’s Birthday.

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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