Market Overview: S&P 500 E-mini Futures
The market formed a monthly E-mini tight trading range near the all-time high. Four consecutive dojis signal temporary balance between bulls and bears. Traders will watch for a breakout in either direction and, more importantly, the strength of follow-through.
S&P500 E-mini futures
The Monthly E-mini chart
- February formed a bear doji closing near the middle of its range, with a prominent lower tail.
- Last month, we said traders would watch whether bulls could break above the sideways trading range with follow-through buying, or whether the market would continue to stall near the all-time high and pull back in the months ahead.
- So far, price continues to consolidate sideways near the all-time high.
- Bulls need a strong breakout above the January 28 high with consecutive bull bars to resume the trend.
- They are targeting a measured move to 7,300, based on the height of the recent tight trading range.
- If the market trades lower, bulls want the December or November lows to hold as support, forming a higher low and a double bottom bull flag with the November low.
- Bears want a reversal from a large wedge pattern (July 27, December 6, and October 29) and a small double top (October 29 and January 28).
- The recent sideways overlapping candlesticks indicate bears have caught up to prior bulls’ strength.
- Bears need a strong breakout below the tight trading range with follow-through selling to increase the odds of a successful reversal.
- Bears want a measured move toward 6,500, based on the height of the 3-month tight trading range.
- If price breaks above the all-time high, bears want the breakout to be weak and fail quickly, forming a failed final flag.
- The market has traded sideways in a tight range for the past three months.
- Four consecutive dojis signal temporary balance between bulls and bears.
- Traders are watching whether this is a distribution phase or a bull flag setting up another leg higher in the months ahead.
- For now, traders will watch for a breakout in either direction and, more importantly, the strength of follow-through.
- Until then, the market may continue oscillating within the tight range in the near term.
The Weekly S&P 500 E-mini chart
- This week formed a bear doji closing near the middle of its range.
- Last week, traders were watching whether bulls could create a strong bull entry bar to retest and break out to a new all-time high, or whether the market would trade higher, form a lower high, and close with a prominent tail above or a bear body.
- The market tested the 20-week EMA twice this week — early in the week and again on Friday — but there is no strong breakout below it yet.
- Bears see a wedge top (December 11, December 26, January 12), a double top (October 29 and January 28), and a smaller double top (January 12 and January 28).
- They also see this week as a lower high major trend reversal and a potential double top bear flag (February 11 and February 25).
- Bears want a strong breakout below the February 5 low and the 20-week EMA, followed by sustained selling and a measured move toward 6,500, based on the height of the 13-week trading range.
- They need consecutive strong bear bars closing well below the 20-week EMA to shift the market to Always In Short.
- If the market trades higher, bears want a lower high relative to the January 28 high. If the market makes a new all-time high, they want weak follow-through buying to increase the odds of a failed breakout.
- Bulls see a large double bottom bull flag (December 17 and February 5) and a micro wedge bull flag (January 20, February 5, February 17).
- Bulls triggered the High 1 buy setup, but the signal bar reversed into a bear doji, reflecting limited bull strength.
- Bulls need consecutive strong bull bars to increase the odds of a successful breakout above the January 28 high, with a measured move target near 7,300 based on the height of the 13-week trading range.
- Bulls want the 20-week EMA to hold as support. If price trades lower, they want the November 21 low to act as support.
- The market has remained in a 13-week tight trading range, reflecting balance between bulls and bears.
- Price continues to form slightly lower highs but has not broken decisively below the 20-week EMA.
- Until there is a clear breakout with follow-through, traders may continue Buy Low, Sell High (BLSH) within the range.
- Traders are watching for a decisive breakout — either below the 20-week EMA or above the all-time high — before trading aggressively.
- The longer price stalls near the October 29 high without a strong breakout, the greater the probability of a deeper pullback.
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Al Brooks and other presenters talk about the detailed E-mini price action real-time each day in the Brooks Trading Course trading room. We offer a 2 day free trial.
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