Market Overview: S&P 500 Emini Futures
The S&P 500 Emini futures broke below the prior week’s bull inside bar but reversed to close near the high. It is likely an Emini failed breakout from the ii (inside-inside) pattern. Bulls want a reversal higher from a wedge bottom and a trend channel line overshoot. They want at least another leg higher from a higher low major trend reversal. The bulls will need to create consecutive bull bars closing far above the June 28 high to increase the odds of a test of the June 2 high.
S&P500 Emini futures
The Weekly S&P 500 Emini chart
- This week’s Emini candlestick was bear doji with a long tail below.
- Last week, we said that odds slightly favor sideways to up and if the week trades below last week’s low, the prominent tails below the last 2 candlesticks increases the odds that there will be buyers below.
- This week traded lower and broke below the lows of the prior 2 candlesticks on Thursday but reversed up to close near the high of the week.
- The bulls failed to create a consecutive bull bar, something they have failed to do since March.
- Bulls want a reversal higher from a trend channel line overshoot, and a wedge bottom (Feb 24, May 20 and June 17).
- The bulls see this week as a failed breakout below the inside bar.
- They want next week to trade above this week’s high and trigger the High 2 bull entry. They want a reversal higher from a higher low major trend reversal.
- The bears want the Emini to stall at the bear trend line or the 20-week exponential moving average, or around or below the June 2 high.
- They want a reversal lower from a double top bear flag with June 28.
- They then want a breakout below the June low and a continuation of the measured move down to 3600, or lower around 3450, based on the height of the 12-month trading range starting from May 2021.
- This week closed near the high of the week and had a long tail below. It is a weak sell signal bar for next week. It is an average buy signal bar for next week.
- In the last 4 weeks, the bears are not getting consecutive bear bars (follow-through selling) like those from April to June. The bear bars have prominent tails below and the bull bars have closes near the highs.
- We have said that the trend channel line overshoot increases the odds of a 2-legged sideways to up pullback. The Emini is likely still in the pullback phase.
- There is a micro wedge on June 30, July 5 and July 14. After 3 failed tries to re-test the June low, the Emini may start to do the opposite instead.
- Odds slightly favor sideways to up and a test of the bear trend line, and after that, near the June 2 high.
The Daily S&P 500 Emini chart
- The Emini gapped down on Monday and continue to trade lower. Thursday broke below the prior 2 candlestick lows but reversed to close near the high. Friday gapped up and closed as a small bull bar at the high above the 20-day exponential moving average.
- Last week, we said that odds slightly favor higher prices. Traders will monitor whether the bulls can create consecutive bull bars breaking far above the bear trend and test the June 2 high.
- This week, the Emini reversed lower from the 20-day exponential moving average and just below the bear trend line.
- The bears want a reversal lower from a double top bear flag (June 28 and July 8.
- They then want a break below the June low followed by a continuation of the measured move down to around 3600 based on the height of the 9-month trading range or lower, around 3450 based on the height of the 12-month trading range starting with May 2021.
- The bulls want a failed breakout below the May low.
- They want a reversal higher from a trend channel line overshoot and a wedge bottom (Feb 24, May 20 and June 17).
- They see this week as a double bottom higher low major trend reversal.
- The bear trend line and 20-day exponential moving average remain resistances above. The bulls will need to break above these resistances with consecutive bull bars closing near their highs.
- In the last 4 weeks, the bear bars are getting smaller with weak follow-through selling. That means a reduction of selling pressure, at least temporarily.
- However, the bulls will need to break through the resistances above to test June 2 major lower high soon. If the Emini trades slightly higher but continues to stall around the 20-day exponential moving average or the bear trend line, odds are the bears will return to sell the lower high for a retest of the June low within 1 to 3 weeks.
- For now, odds slightly favor sideways to up for next week.
Traders can see the end of the day bar-by-bar price action report by signing up for free at BrooksPriceAction.com. Al talks about the detailed Emini price action real-time throughout the day in the BrooksPriceAction.com trading room. We offer a 2 day free trial.
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Thanks Andrew for the report.
Question to Al/you, in the trade room Al constantly saying that he hope/expect another new low given bulls haven’t yet produced a decent reversal bar/s. Does Thursday buy signal and Friday entry bar have changed such assumption?
Dear Eli, a good day to you..
For Thursday and Friday, I feel like it is part of the overlapping price action of the prior few weeks.
A double bottom bull flag – yes..
A reversal bar and follow through.. hmmm… maybe..
but a good reversal bar is something that went far in one direction, and then clearly reversed and close in the opposite direction.. like these bars: 24 Jan and 24 Feb 2022.
Alright, have a blessed week ahead!
Thanks Andrew, so you also believe and work under the assumption we shall/may face a new low?
No, I don’t have that assumption at all..
The market can rally with the current setup even..
double bottom higher low mtr
trend channel line overshoot
However, we need to see how strong the rally is, if it comes.. and decide if it will form a lower high, and retest the low again, or, it will be the reversal that re-test the high..
So, either situation is still possible. Remember, bulls have not yet been able to break the resistance with strength yet as of now..
Alright, wishing a blessed week ahead..
Btw, I think the bad buy signal on the weekly chart (week of June 13th) is equally/more important IMHO. So on the weekly chart, we will need a good bull buy signal likely after a new low…