Emini Higher Low, Strong Bull Bar

Market Overview: S&P 500 Emini Futures

The weekly chart was a strong bull bar and the bulls hope that the S&P 500 Emini futures market is forming a higher low followed by another strong leg up. The bulls will need to create strong follow-through buying to increase the odds of a retest of the February 2 high. The bears hope that the Emini is simply retesting the February 2 high and want a reversal down from a lower high major trend reversal or a double top. 

S&P500 Emini futures

The Monthly Emini chart

• The February monthly Emini candlestick was a bear reversal bar closing below the 20-month exponential moving average.
• Last month, we said that the odds favor an upside breakout above January and traders will see if the bulls can create a follow-through bull bar. Or if the Emini trades slightly higher, but reverses to close as a bear bar below the 20-month exponential moving average.
• The bulls see the selloff from January 2022 as a wedge bull flag (February 24, June 17 and October 13). 
• They got a second leg sideways to up in February, but it reversed into a bear bar. 
• They failed to get a follow-through bull bar and the Emini is stalling around the 20-month exponential moving average.
• The bulls want March to close with a bull body closing near its high. 
• They have a 5-bar bull microchannel. Often, there are buyers below the first pullback below such a strong microchannel.
• The move down since January 2022 had a lot of overlapping bars. The bears are not yet as strong as they hope to be. 
• They see the move down from January 2022 as a broad bear channel, with the August 2022 high as the last lower high.
• While the bulls have broken the bear trend line, the bears hope that the recent move up is simply forming another lower high (to Aug 2022) with a flatter trend line.
• If the Emini trades higher, they want a reversal lower from a double top bear flag with August 2022 high and a lower high major trend reversal.
• While March has traded slightly below the February low, some bears may feel that the February low may not have been adequately tested.
• The bears want a retest of the March low after the current pullback (bounce).
• The candlesticks in the last 9 months are overlapping which means the Emini likely has transitioned into a trading range phase between 4300 and 3500.
• The last 4 candlesticks had overlapping bodies with alternating bull and bear bodies. The Emini is in a tight trading range.
• Poor follow-through and reversals are more likely within a trading range.
• Traders will BLSH (Buy Low, Sell High) until there is a breakout from either direction.
• Until the bulls can break far above the August 2022 high, the broad bear channel may still be in play.

The Weekly S&P 500 Emini chart

• This week’s Emini candlestick was a strong bull bar reversal 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 lower and traders will see if the bears can continue to create strong bear bars, or will the Emini stall at a higher low potentially setting up another third leg up.
• This week broke below last week’s low but reversed to close as a bull reversal bar.
• The bears see the move up to February 2 high simply as a two-legged swing up.
• They want a reversal down from a higher high major trend reversal. 
• If the Emini trades higher, they want a reversal down from a lower high major trend reversal or a double top with February 2 high.
• 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 bears want a retest of the October low followed by a strong breakout and a continuation of the bear trend.
• The bulls see the last 8 months as forming an inverted head and shoulders, with the December low being the right shoulder.
• However, an inverted head and shoulders pattern often ends up as a bear flag instead of a reversal pattern.
• The bulls hope that the current pullback will form a higher low, followed by another leg up forming a wedge pattern with the first two legs being December 1 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. 
• After the spike and broad channel down from January 2022, the Emini may have transitioned into a trading range phase between 4300 and 3500.
• Traders will BLSH (Buy Low, Sell High) until there is a breakout from either direction.
• The move up from October 2022 may simply be a bull leg within a trading range.
• Since this week was a bull bar closing near the high, odds favor the Emini to trade at least a little higher.
• Traders will see if the bulls can create a strong follow-through bull bar or if next week trades slightly higher but stalls and closes as a bear bar or a doji with a long tail above.

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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