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Emini Outside Bear Bar Pullback

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Market Overview: S&P 500 Emini Futures

The market formed an Emini outside bear bar pullback on the weekly chart. The bulls want any pullback to be weak and sideways. The bears must create follow-through selling trading below the 20-week EMA and the bull trend line to show they are back in control.

S&P500 Emini futures

The Weekly S&P 500 Emini chart

Emini Weekly - Bears Need FT Selling, Bulls Want Weak PB, Emini Outside Bear Bar Pullback
  • This week’s Emini candlestick was an outside bear bar closing in its lower half with a long tail above.
  • Last week, we said traders would see if the bulls could create more follow-through buying to retest the all-time high area, or if the market would start to stall, forming a minor pullback instead.
  • The market traded slightly higher early in the week but lacked follow-through buying, closing lower for the week.
  • The bulls got a strong reversal in a tight bull channel.
  • They see the selloff (Apr 7) forming a major higher low and the market is in a broad bull channel.
  • They hope that the strong selloff has alleviated the prior overbought condition. They want a resumption of the trend.
  • They hope the market has flipped into Always In Long.
  • They want any pullback to be weak and sideways (overlapping candlesticks, doji(s), long tails below candlesticks) and the 20-week EMA or the bull trend line to act as support.
  • The bears see the current move as a retest of the prior trend’s extreme high (Dec 6).
  • They want the market to form a lower high major trend reversal or a double top with the December 6 high.
  • They must create follow-through selling trading below the 20-week EMA and the bull trend line to show they are back in control.
  • So far, the buying pressure since the April 7 low has been stronger (strong bull bars closing near their highs) than the weaker selling pressure (bear bar with limited follow-through selling).
  • The market likely has flipped into Always In Long.
  • The odds slightly favor the current pullback to be minor, followed by at least a small sideways to up leg to retest the recent leg high (May 19).
  • For now, the market could trade slightly lower. Traders will see if the bears can create a strong follow-through bear bar trading below the 20-week EMA.
  • Or will pullback be shallow, lacking follow-through selling and holding around the 20-week EMA area?

The Daily S&P 500 Emini chart

Emini Daily - Bulls Want Small Leg up, Bears Want TBTL
  • The market traded slightly higher early in the week but lacked follow-through buying. The Emini then traded sideways to down to retest the 20-day EMA.
  • Last week, we said traders would see if the bulls could create more follow-through buying to retest the all-time high, or if the market would stall, forming a pullback to the 20-day EMA in the next few weeks ahead instead.
  • The bulls got a strong reversal trading above the 200-day EMA.
  • They see the market forming a major higher low (Apr 7) and want the broad bull channel to continue.
  • They hope the selloff has alleviated the prior overbought condition and that the market has flipped into Always In Long.
  • They see the current move as a pullback (May 23).
  • They want the 20-day EMA, 200-day EMA or the bull trend line to act as support.
  • They expect to get at least a small sideways to up leg to retest the May 19 high.
  • The bears see the current move as a retest of the prior extreme high (Dec 6).
  • They want the market to form a lower high major trend reversal and a double top.
  • They see the rally from April 21 low to May 19 high as climactic and overbought.
  • They want a TBTL (Ten Bars, Two Legs) pullback lasting a few weeks from a wedge pattern (Apr 9, May 2, and May 19).
  • They must create strong consecutive bear bars trading below the 20-day EMA and 200-day EMA to show they are back in control.
  • The move from the April 21 low to the May 19 high is in a tight bull channel which means strong bulls.
  • The market likely has flipped into Always In Long.
  • The odds slightly favor the current pullback to be minor.
  • Traders expect at least a small sideways to up to retest the recent leg high (May 19) after the pullback (even if it only forms a lower high).
  • For now, traders will see the strength of the pullback. Will it be sideways, holding around (or above) the 20-day EMA and 200-day EMA?
  • Or will the bears be able to create strong consecutive bear bars trading below the 20-day EMA and 200-day EMA instead?

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