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E-mini Bulls Need Follow-through Buying

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Market Overview: S&P 500 E-mini Futures

The S&P 500 E-mini bulls need follow-through buying to increase the odds of reaching the measured move target above. The bears want a reversal from a wedge top pattern (May 19, Jul 31, and Oct 24). They need to create consecutive bear bars closing near their lows to show that they are regaining control.

S&P500 E-mini futures

The Weekly S&P 500 E-mini chart

E-mini Weekly - Bulls Want Resumption of Trend, Need FT, E-mini Bulls Need Follow-through Buying
  • This week’s E-mini candlestick was a bull bar closing near its high, making a new all-time high.
  • Last week, we said traders would watch whether the bears could create follow-through selling in the weeks ahead — something they have failed to do since the April low — or if the pullback phase would remain sideways and weak.
  • So far, the bears remain unable to create follow-through selling on the weekly chart.
  • The bears want a reversal from a wedge top pattern (May 19, Jul 31, and Oct 24).
  • They hope the recent 5-week trading range will be the final flag of the move.
  • However, the problem for the bears is that they have been unable to create sustained follow-through selling on the weekly chart since the April 7 low.
  • They need to create consecutive bear bars closing near their lows to show that they are regaining control.
  • The bulls view the recent pullback (Oct 10) as a retest of the August breakout point and want a resumption of the bull trend.
  • Their next upside targets are the 6900 and 7000 levels, with a measured move projection based on the height of the recent 5-week trading range that could take the market toward 7100.
  • To reach these targets, the bulls must create sustained follow-through buying.
  • The move up since the April 21 low has been in a tight bull channel, showing strong bullish momentum.
  • Buying pressure remains stronger — with consecutive bull bars — while selling pressure has been weak and lacking sustained follow-through selling.
  • Although the rally is slightly climactic and overbought, the bears still need strong consecutive bear bars before traders will be willing to sell aggressively.
  • Since this week closed as a bull bar near its high, the market could gap up next week. Small gaps typically close early.
  • For now, the market could still trade at least a little higher.
  • Traders will watch whether the bulls can create follow-through buying to reach the next round-number targets.
  • Or if the market will trade slightly higher but begin forming prominent tails or bear bodies instead?

The Daily S&P 500 E-mini chart

E-mini Daily - Retest High, Bears Want HH MTR
  • The market gapped up above the 20-day EMA on Monday and then traded sideways for most of the week. On Friday, it gapped up into a new all-time high and closed as a small bull doji.
  • Last week, we said traders would watch whether the bears could create sustained follow-through selling, or if the pullback would remain sideways and weak instead.
  • So far, the pullback has remained sideways and lacking strong follow-through selling.
  • The bulls see the October 10 low as a pullback within the bull trend and want it to remain weak and sideways (overlapping candlesticks, dojis, long tails below bars).
  • They want a retest and breakout above the October 9 high, followed by a resumption of the trend.
  • The bulls want a measured move based on the height of the recent sideways trading range, projecting up toward 7100.
  • Their next key upside levels are 6900 and 7000 round numbers.
  • If the market trades lower, the bulls want the 20-day EMA or the October 10 low to act as support, forming a double bottom bull flag.
  • The bears want a reversal from a large wedge pattern (May 19, Jul 31, and Oct 9) and an embedded wedge (Aug 13, Sept 22, and Oct 9).
  • They view the current move as a retest of the prior October 9 all-time high and want a reversal from a higher high major trend reversal and a failed breakout.
  • The current leg from the October 10 low has three pushes up (Oct 15, Oct 21, and Oct 24), forming a smaller wedge.
  • The bears hope the gap up on Friday will turn out to be an exhaustion gap.
  • They want a TBTL (Ten Bars, Two Legs) pullback lasting several weeks.
  • They must create strong consecutive bear bars closing near their lows, trading far below the 20-day EMA and the bull trendline to indicate they are in control.
  • The move from the April 21 low remains in a tight bull channel, indicating strong buying momentum.
  • The market is slightly overbought and climactic, but until the bears can create strong consecutive bear bars — something they have failed to do since April 21 low — traders will not be willing to sell aggressively.
  • For now, traders will watch whether the bulls can create sustained follow-through buying and resume the trend.
  • Or if the market will stall near current highs and pull back toward the 20-day EMA or the October 10 low instead?

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