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Weekly E-mini Bulls Want a Breakout

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Market Overview: S&P 500 E-mini Futures

The weekly E-mini bulls want a breakout into new all-time highs followed by a resumption of the bull trend. Bears want the December 11 high area to act as resistance. If the market makes a new all-time high, they hope the follow-through buying will be weak and result in a failed breakout.

S&P500 E-mini futures

The Weekly S&P 500 E-mini chart

E-mini Weekly - Bears Want Market to Stall, Bulls Want BO, Weekly E-mini Bulls Want a Breakout
  • This week’s E-mini candlestick was a small bull bar closing near its high, testing the December 11 high.
  • Last week, we noted traders were watching whether bears could produce further follow-through selling toward the 20-week EMA, or whether the lack of follow-through would lead to a retest of the December 11 high in the weeks ahead.
  • Bears were unable to create additional follow-through selling.
  • Bears view the recent rally (December 11) as a retest of the prior trend extreme high (October 29).
  • They see the current move as the second leg sideways to up and want the market to stall near the December 11 high, forming a double top bear flag (November 12 and December 11) or a wedge bear flag (November 12, December 11, and December 26), leading to a lower high major trend reversal.
  • Bears want the December 11 high area to act as resistance. If the market makes a new all-time high, they hope the follow-through buying will be weak and result in a failed breakout.
  • Bears need strong follow-through selling trading well below the 20-week EMA to demonstrate control.
  • Bulls view the recent selloff (November 21) as a pullback that has relieved overbought conditions.
  • They see the December 17 move as the second leg sideways to down within the pullback phase and want it to remain weak and mostly sideways.
  • Bulls want the 20-week EMA to act as support, forming a wedge bull flag (October 10, November 21, and December 17) or a double bottom bull flag (November 21 and December 17).
  • Bulls want a retest and breakout above the all-time high, followed by a resumption of the bull trend.
  • The recent pullback to the 20-week EMA (November 21) has traders questioning whether overbought conditions have been sufficiently worked off.
  • The overlapping range over the past 15 weeks indicates increased two-sided trading and a loss of momentum.
  • For now, traders will watch whether bulls can create further follow-through buying into new all-time highs, or whether the market continues to stall around the December 11 high area in the weeks ahead.

The Daily S&P 500 E-mini chart

E-mini Daily - Bears Want Wedge Bear Flag, Bulls Want New High
  • The market traded sideways to up for the week.
  • Last week, we noted traders were watching whether bears could produce a second leg sideways to down below the 20-day EMA, or whether the pullback would hold around the 20-day EMA as a higher low relative to November 21, followed by a second leg sideways to up.
  • Bulls hope the November 21 pullback has relieved overbought conditions.
  • They view the December 17 move as a minor pullback and want the 20-day EMA to act as support, which has been the case so far.
  • Bulls want a reversal and trend resumption from a large wedge bull flag (October 10, November 21, and December 17).
  • They want a retest and breakout above the all-time high with sustained follow-through buying.
  • If the market trades lower, bulls want a higher low relative to the November 21 low, with the bull trend line acting as support.
  • Bears view the recent rally (December 11) as a retest of the all-time high (October 29), with this week as the second leg sideways to up of that move.
  • They want the market to stall near the November 12 high area, forming a double top bear flag (November 12 and December 11), a wedge bear flag (November 12, December 11, and December 26), and a larger lower high major trend reversal.
  • Bears need consecutive strong bear bars closing near their lows and trading well below the 20-day EMA and the November 21 low to signal control.
  • If the market makes a new all-time high, bears hope the follow-through buying will be weak and lead to a failed breakout.
  • Since September, the market has shown increasing overlapping ranges, indicating more two-sided trading and reduced momentum.
  • Traders are watching whether bulls can create further follow-through buying into new all-time high territory, or whether the market continues to stall around the December 11 high area instead.

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