Big Monthly E-mini Bull Bar

Market Overview: S&P 500 E-mini Futures

The market formed a big monthly E-mini bull bar into new all-time high territory. Bulls need follow-through buying to increase the odds of trend resumption. Bears want the trend channel line to act as resistance. They want any breakout above it to fail within a bar or two, followed by a retest of the bull trend line.

S&P500 E-mini futures

The Monthly E-mini chart

• April formed a big bull bar closing near its high.
• Last month, we said traders would watch whether bears could generate follow-through selling in April, or whether the market would retest the prior high.
• The market traded higher, breaking into new all-time high territory.
• Bulls view the March 30 pullback as a test of the 20-month EMA that has likely relieved the prior overbought condition.
• Bulls want a strong breakout followed by a measured move based on the height of the recent trading range, projecting to around the 7550 area.
• The next target for the bulls is the top of the trend channel line.
• Bulls need follow-through buying to increase the odds of trend resumption.
• Bears got a pullback to the 20-month EMA in March and see the current move as a retest of the prior high.
• While the market could still trade higher, they want a failed breakout forming a reversal bar within a few months.
• They see the April move as part of a climactic rally, with a big bull bar late in a trend.
• If the market trades higher, bears want the trend channel line to act as resistance. They want any breakout above it to fail within a bar or two, followed by a retest of the bull trend line.
• Bears need a strong reversal bar closing near its low to create a short setup.
• The market pulled back to the 20-month EMA and then rallied strongly into a new all-time high.
• The April monthly candlestick closed near its high, increasing the odds of at least slightly higher prices in May.
• Big bull bars late in a trend can be part of a buy climax.
• Traders will watch whether bulls can create follow-through buying in May.
• If the market breaks above the bull trend channel line, traders will watch whether the move is sustainable or lacks follow-through buying.
• If a breakout fails, it typically does so within 2–5 bars.

The Weekly S&P 500 E-mini chart

• This week formed another follow-through bull bar closing in its upper half with a prominent tail above.
• Last week, we said the market could still trade at least a little higher. The strength of the move increases the probability of at least a small sideways-to-up leg after any pullback.
• Bulls have generated a strong rally, with consecutive bull bars closing near their highs and making new all-time highs.
• Bulls want a strong breakout followed by a measured move based on the height of the recent trading range, projecting to around 7550.
• The next target for the bulls is the trend channel line around the 7430 area.
• Bulls want a spike and channel pattern lasting several months.
• If the market pulls back, bulls want the 20-week EMA to act as support.
• They expect at least a small second leg sideways to up to retest the current leg high (May 1) after any pullback.
• Bears see the current move as a buy vacuum retest of the prior high and the trend channel line.
• Bears view the move as a parabolic buy climax and unsustainable without a sideways-to-down pullback.
• Bears want the trend channel line to act as resistance. If the market trades higher, they want the next trend channel line around the 7430 area to act as resistance.
• If the market trades higher, bears want a failed breakout above the trend channel line within a few bars, followed by a retest of the bull trend line.
• Bears want at least a small two-legged sideways-to-down pullback lasting a few weeks.
• Bears need strong bear bars closing near their lows to show control.
• The market has rallied strongly over the past five weeks, with consecutive bull bars closing near their highs.
• The market is Always In Long.
• The last two weeks formed smaller bull bars, indicating slowing momentum.
• Traders will watch whether the market stalls around the current trend channel line or the one above it near 7430.
• For now, the market could still trade at least a little higher. However, because of the climactic nature of the rally, a pullback can occur at any time.

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