Weekly Emini Tight Bull Channel

Market Overview: S&P 500 Emini Futures

The market formed a weekly Emini tight bull channel testing the prior all-time high. The bulls must create a strong breakout above the prior all-time high (Dec 6) with follow-through buying to increase the odds of a sustained move. The bears want a failed breakout above the prior all-time high.

S&P500 Emini futures

The Weekly S&P 500 Emini chart

• This week’s Emini candlestick was a bull doji closing in its upper half.
• Last week, we said traders would see if the bulls could create follow-through buying above the December 6 high, or if the market would trade slightly higher but stall in the weeks ahead instead.
• The bulls got a breakout above the December 6 high and want a resumption of the bull trend.
• They want another strong leg up from a double bottom bull flag (May 23 and Jun 23).
• They want a Leg 1 = Leg 2 move which will take the market to the 6800 area (leg 1 being the Apr 21 low to the May 19 high).
• They must create a strong breakout above the prior all-time high (Dec 6) with follow-through buying to increase the odds of a sustained move.
• The bears see the current move as a buy vacuum retest of the prior trend’s extreme high (Dec 6).
• They want a reversal from a higher high major trend reversal and a double top (Dec 6).
• They want a failed breakout above the prior all-time high.
• They must create strong consecutive bear bars to show they are back in control. So far, they haven’t been able to do so since the April low.
• So far, the move up since the April 21 low is in a tight bull channel.
• The buying pressure is stronger (strong consecutive bull bars closing near their highs) than the weaker selling pressure (bear bars with limited follow-through selling).
• The market could still trade at least a little higher.
• The market is Always In Long.
• Traders will see if the bulls can create follow-through buying above the December 6 high.
• Or will the market stall and form a pullback in the weeks ahead instead?
• For now, the market remains in the sideways to up phase.
• Odds favor any pullback to be minor.

The Daily S&P 500 Emini chart

• The market opened lower on Monday, but the follow-through selling was limited. The market formed a retest of the July 3 high on Thursday followed by a small pullback on Friday.
• Previously, we said traders would see if the bulls could create a retest and breakout above the December 6 high, or if the market would trade slightly higher but stall around the December 6 high area instead.
• So far, the market is trading sideways around the December 6 high area.
• The bulls got a strong retest of the December 6 high in a tight bull channel.
• They want the broad bull channel to continue and a measured move (a Leg 1 = Leg 2 move will take the market to the 6800 area – leg 1 being the Apr 21 low to the May 19 high).
• They must create a strong breakout above the December 6 high with sustained follow-through buying to increase the odds of a sustained move up.
• If the market trades lower, they want the 20-day EMA to act as support followed by at least a small sideways to up leg to retest the current leg extreme high (now Jul 10).
• The bears see the current move as a retest of the prior trend extreme high (Dec 6).
• They want a reversal from a higher high major trend reversal and a wedge pattern (May 2, May 19, and Jul 10).
• At the least, they want a TBTL (Ten Bars, Two Legs) pullback lasting a few weeks.
• They must create consecutive bear bars closing near their lows trading far below the 20-day EMA to increase the odds of a deeper pullback.
• The move from the April 21 low is in a tight bull channel, indicating strong bullish momentum.
• The market is Always In Long.
• The current move is strong enough for traders to expect at least a small sideways to up leg to retest the trend extreme high (now Jul 10) after a pullback.
• For now, traders will see if the bulls can create follow-through buying above the December 6 high.
• Or will the market stall around the December 6 high area followed by a pullback in the weeks ahead instead?
• The market remains in the sideways to up phase.
• Odds favor any pullback to be minor.

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