The monthly S&P500 Emini candle chart is in a strong bull trend, but overbought
Although there is a bull breakout on the weekly candle chart, the monthly chart is very overbought. It can continue to be overbought for a long time, but it has only been this overbought 3 times in the past 20 years. Each prior time was followed by a reversal of 20% or more. So far, the candle on the monthly chart is a doji, which represents indecision, and it is occurring at an all-time high.
Bull breakout on the weekly candle chart
The weekly Emini candle closed above the highs of the last two weeks and at an all-time high. That close created a gap above those highs. The bulls want the gap to be a measuring gap that will be followed by a strong leg up. The bears want the Emini to trade below those highs next week, turning the gap into a possible exhaustion gap. Since the Emini is close to the top of the channel and most channel breakout attempts fail, the odds favor a move down to the bottom of the weekly channel at some point within a month or so.
The daily S&P500 Emini candle chart is at an all-time high, but it is struggling to find enough buyers at this level.
The Emini daily chart is at an all-time high. However, it continues to fail to resume up. So far, there are not enough buyers around 2,000 to create a strong bull breakout. If the bulls continue to fail, the Emini will fall to lower levels as it searches for buyers.
The bulls see the past 3 months as a head and shoulders bottom bull flag and they expect a strong bull breakout above the top of the channel. Since 70% of bull breakout above bull channels fail, this one probably will, too.
The bears see the Emini as being in a 3 month wedge top. They are looking for a reversal down to the bottom of the wedge, which is the August low, around 1900.