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No Emini Follow-through Selling

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Market Overview: S&P 500 Emini Futures

There was no Emini follow-through selling on the weekly chart this week. The bears are not yet as strong as they hoped to be. They see this week as a retest of the prior trend extreme high (Nov 11) and want a reversal from a lower high major trend reversal. The bulls want a retest of the November 11 high followed by a breakout into new all-time high territory.

S&P500 Emini futures

The Weekly S&P 500 Emini chart

Emini Weekly - No FT Selling, Retest High and BO or Stall, No Emini Follow-through Selling
  • This week’s Emini candlestick was a bull bar closing near its high.
  • Last week, we said the odds slightly favor a breakout below the (almost) ioi (inside-outside-inside) pattern first. Traders would see if the bears could create follow-through selling or if they would fail to do so.
  • The market traded sideways to up for the week. The bears could not create a follow-through bear bar.
  • The bulls see the market as being in a broad bull channel.
  • They got another leg up, completing the wedge pattern (Mar 21, Jul 16, and Nov 11) and the embedded wedge (Aug 30, Oct 17, and Nov 11).
  • They saw last week as a pullback and want a retest of the November 11 high followed by a breakout into new all-time high territory.
  • If there is a deeper pullback, they want the 20-week EMA or the bull trend line to act as support.
  • The bears were not able to create a follow-through bear bar this week. They are not yet as strong as they hoped to be.
  • They want a reversal from a large wedge (Mar 21, Jul 16, and Nov 11) and an embedded wedge (Aug 30, Oct 17, and Nov 11).
  • They see this week as a retest of the prior trend extreme high (Nov 11) and want a reversal from a lower high major trend reversal.
  • If the market trades higher, they want a failed breakout and a double top with the November 11 high.
  • They hope that the recent sideways candlesticks (end of Sept to early Nov) will be the final flag of the move.
  • They see the recent big bull bar (Nov 11) appearing late in a trend as a possible buy climax.
  • They need to create a couple of consecutive bear bars closing near their lows to increase the odds of a pullback lasting at least a few weeks.
  • Since this week’s candlestick is a bull bar closing near its high, it can be a buy signal bar for next week.
  • The market may still trade at least a little higher to test the November 11 high.
  • The recent candlesticks have overlapping ranges with poor follow-through. If this continues to be the case, we may be entering into a more two-sided trading phase (trading range).
  • Traders will see if the bulls can create a follow-through bull bar testing the November 11 high followed by a breakout above.
  • Or will the market trade slightly higher but stall around the November 11 high area followed by profit-taking activity?
  • The move up since October 2023 while strong, has lasted a long time and is slightly climactic. The odds of a deeper pullback are increasing.
  • However, the bears need to do more to show that they are at least temporarily back in control. They have yet to do so.

The Daily S&P 500 Emini chart

Emini Daily - No FT Selling, Retest High & BO or MTR
  • The market traded sideways around the 20-week in the first half of the week. Thursday gapped up and closed as a doji with some follow-through buying on Friday.
  • Last week, we said that traders would see if the bears could create more follow-through selling or if the market would stall around the 20-day EMA or the bull trend line area, followed by a retest of the November 11 high instead.
  • The bulls got the third leg up to complete the large wedge pattern (Mar 21, July 16, and Nov 11) and the embedded wedge (Aug 30, Oct 17, and Nov 11).
  • They see the market trading in a broad bull channel and want the move to continue for many months.
  • They see last week as simply a pullback. They want the 20-day EMA or the bull trend line to be support areas. So far this is the case.
  • Next, the bulls want a retest of the November 11 high and a breakout into new all-time high territory.
  • The bears want a reversal from a large wedge pattern (Mar 21, Jul 16, and Nov 11), an embedded wedge (Aug 30, Sep 25, and Nov 11) and a final flag (end of Sept to early Nov).
  • They see the move up to the November 11 high as a possible buy climax and this week as a retest of the prior trend extreme high.
  • They want a reversal from a lower high major trend reversal or a double top with the November 11 high.
  • The bears want a deep pullback lasting at least a few weeks – a TBTL (ten bars, two legs) pullback.
  • They need to create consecutive bear bars closing near their lows trading far below the 20-day EMA and the bull trend line to show they are back in control.
  • For now, the market may still trade slightly higher to retest near the November 11 high area.
  • Traders will see if the bulls can create a strong retest and breakout above the November 11 high.
  • Or will the sideways to up leg be weak (with overlapping candlesticks, bear bars and doji(s))? If this is the case, the odds of a profit-taking phase lasting a few weeks will increase.
  • The move up since October 2023 has lasted a long time. The wedge and embedded wedge increase the odds of a pullback lasting at least a few weeks.
  • The bears need to do more to show that they are back in control. Until they can do that, traders will not be willing to sell aggressively.

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