Emini sell vacuum retest of 5/20 low

Market Overview: S&P 500 Emini Futures

The S&P 500 Emini futures stalled around the Feb/March low and the bulls failed to get follow-through buying. The bears got the second leg sideways to down they were expecting. Odds favor at least slightly lower prices next week. As strong as the sell-off is, it could simply be a sell vacuum retest of the 5-week trading range low. If there is a breakout, odds slightly favor a downside breakout more. 

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. It was a strong bear bar.
• Last week, we said the bears will try to trigger the low 1 sell signal bar by trading below the week’s low. Traders will have been monitoring whether this week closes as a bear bar near the low or reverses higher and close near the high with a long tail below. 
• This week closed as a big bear bar near the low. The bears got follow-through selling following last week’s bear doji.
• We have said that the bears want the Emini to stall at a lower high around Feb/March lows or around the 20-week exponential moving average or the bear trend line.
• So far it stalled around the Feb/March lows and reversed lower.
• The sell-off since March was in a tight bear channel down. Odds are the pullback would be minor and traders expect at least a small second leg sideways to down move after a pullback because V-bottoms are not common. This week was the second leg sideways to down.
• The bears want a retest of the May low, and a breakout followed by a continuation of the measured move down to 3600.
• The bulls want a failed breakout below the 9-month trading range. 
• They see a wedge bull flag (Jan 24, Feb 24, and May 20) with an embedded parabolic wedge (April 26, May 2, and May 20).
• They see this leg down as a retest of the low and want a reversal higher from a higher low major trend reversal and a double bottom with May 20 low.
• Since this week was a big bear bar closing near the low, it is a weak buy signal bar for next week. It is a good sell signal bar. 
• It increases the odds of a gap down on Monday. However, small gaps often close early.
• The Emini has been in a trading range for the last 5 weeks. Traders may BL/SH (Buy Low, Sell High). 
• As strong as the sell-off was this week, it could simply be a sell vacuum test of the 4-week trading range low.
• If there is a breakout, odds slightly favor a downside breakout.
• For now, odds slightly favor at least slightly lower prices next week.
• Bears want another bear bar which will increase the odds of another breakout attempt below the May low, while bulls want next week to close as a bull reversal bar even though next week may trade lower first.

The Daily S&P 500 Emini chart

• The Emini remained in the tight trading range earlier in the week and broke out below on Thursday followed by a gap down on Friday. Friday closed as a bear bar near the low.
• We have said that the channel down from March 29 has been tight. Odds are, there should be at least a small second leg sideways to down after the pullback is over. 
• If the bounce is more sideways and stalls around the 20-day exponential moving average or May 17 high or Feb/March low, bears will likely return to sell the double top bear flag.
• This week was the second leg sideways to down as sellers sold the micro double top bear flag (Jun 2 And Jun 7).
• The bulls hope that this sell-off is simply a sell vacuum test of the low. 
• The bulls see a wedge bull flag (Jan 24, Feb 24, and May 20) with an embedded parabolic wedge (April 26, May 2, and May 20). They want a reversal higher from a higher low major trend reversal.
• Since Friday was a bear bar closing near the low, it is a weak buy signal bar for Monday. 
• It may even gap down on Monday. Remember that small gaps usually close early.
• The bears want a retest of the low followed by a breakout and a continuation of the measured move down to around 3600 based on the height of the 9-month trading range.
• We have said there should be at least a small second leg sideways to down after the pullback is over. This week is the start of the second leg sideways to down.
• The bears will need to create consecutive bear bars closing near the low to increase the odds of a breakout below May low.
• If the Emini stalls around the May low and the bulls get a strong bull reversal bar or a micro double bottom, we may see bulls return for a double bottom major trend reversal higher.

Trading room

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.

---

Market analysis reports archive

You can access all weekend reports on the Market Analysis page.

---