Market Overview: S&P 500 Emini Futures
The S&P 500 Emini futures bulls got an Emini second leg up and want a retest of the December high. They see the last 6 months as an inverted head and shoulders bottom. Odds slightly favor the Emini to trade at least a little higher. The bulls need to break far above the major bear trend line and December high to signal the end of the selloff.
S&P500 Emini futures
The Weekly S&P 500 Emini chart
- This week’s Emini candlestick was a bull bar closing near its high with a long tail below.
- Last week, we said that odds slightly favor the Emini to trade at least a little higher and traders will see if the bulls can create follow-through buying, or if the Emini trades higher but stalls around the 20-week exponential moving average.
- The bulls got a consecutive bull bar closing far above the 20-week exponential moving average.
- They want a reversal up from a higher low major trend reversal, a double bottom bull flag (Nov 3 and Dec 22) and a larger second leg sideways to up retesting the December high.
- They see the last 6 months as forming an inverted head and shoulders, with the December low being the right shoulder.
- The bulls need to break far above the major bear trend line and December high to signal the end of the selloff.
- Since this week was a bull bar closing near its high, it is a good buy signal bar for next week and a weak sell signal bar.
- Odds slightly favor the Emini to trade at least a little higher.
- The next target for the bulls is the December high.
- The bears got a pullback lower from a wedge bear flag (Oct 5, Nov 15, and Dec 1), a double top bear flag (Sept 12 and Dec 1) and a lower high.
- While the bears got a big outside bear bar, the follow-through selling was weak.
- They hope to get at least a small second leg sideways to down after a pullback (bounce).
- The problem with the bear’s case is that the current pullback is strong with consecutive bull bars closing near their highs.
- If the Emini trades higher, the bears want a reversal lower from a double top with the December high.
- Bears see the selloff from January 2022 as a broad bear channel. Until the bulls can break far above the December high, the broad bear channel remains in play.
- For now, odds slightly favor the Emini to trade at least a little higher, possibly retesting near the December high.
- Traders will see if the bulls can create another strong consecutive bull bar or will the Emini trade higher but reverse to close with a bear body forming a double top with the December high.
- If next week is another strong consecutive bull bar, the odds of a breakout attempt above the December high increase.
The Daily S&P 500 Emini chart
- The Emini formed a reversal bar on Monday, but the bears failed to get follow-through selling. The Emini then traded sideways to up for the rest of the week.
- Last week, we said that odds slightly favor the Emini to trade at least a little higher and traders will see if the bulls get strong follow-through buying or not.
- This week traded higher with consecutive bull bars above the 20-day exponential moving average.
- 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 want a retest followed by a breakout above December high and the major bear trend line.
- Until the bulls can break far above the December high, the broad bear channel remains in play.
- The bulls need to create strong consecutive bull bars closing near their highs and trading far above the major bear trend line and December high, to convince traders that the selloff from January has ended.
- The bears got a reversal lower from a wedge bear flag (Nov 1, Nov 15, and Dec 1) around the major bear trend line.
- They want at least a small second leg sideways to down after a pullback (bounce). If the Emini trades higher, they want a reversal lower from a double top with the December high.
- Bears want a retest of the October low followed by a strong breakout and a measured move down.
- They will need to create strong consecutive bear bars closing near their lows (like August) to increase the odds of a reversal down.
- The bears see the selloff from January 2022 as a broad bear channel. The major bear trend line remains as resistance above.
- Since Friday was a bull bar closing near its high, it is a good buy signal bar for Monday.
- Odds slightly favor the Emini to trade at least a little higher.
- Traders will see if the bulls can break far above the major bear trend line and retest the December high, or if the Emini trades higher, but stalls and reverses lower.
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