Market Overview: S&P 500 E-mini Futures
There were buyers below the 7-Bar Emini bull microchannel on the monthly chart. Bulls need to create a strong breakout above the October 29 high with sustained follow-through buying to resume the trend. Bears will need consecutive bear bars closing near their lows to show they are regaining control.
S&P500 E-mini futures
The Monthly E-mini chart
- The November monthly E-mini candlestick had a small bear body closing in its upper half, with a long tail below.
- Last month, we said traders would watch whether bulls could create additional follow-through buying toward the next round numbers, or if the market would begin to stall and form a minor pullback instead.
- The market formed a pullback, breaking below October’s low, but the move lacked sustained follow-through selling.
- Previously, bulls had a 7-bar bull microchannel, showing persistent buying pressure.
- There are often buyers below the first pullback after such a strong microchannel, and this was the case in November.
- Bulls expect at least a small sideways-to-up leg to retest the trend-extreme high (October 29). This move is underway.
- They want a resumption of the bull trend, with the next targets at the 7,000 and 7,100 levels.
- They need to create a strong breakout above the October 29 high with sustained follow-through buying to resume the trend.
- Bears want a reversal from a large wedge top (July 27, December 6, and October 29) and see the rally as climactic.
- The problem for the bears is the lack of strong bear bars with follow-through selling.
- The long tail below November’s candlestick further indicates the bears are not yet strong.
- They will need consecutive bear bars closing near their lows to show they are regaining control.
- So far, the move up from the April 7 low remains strong, with a tight bull channel and consecutive bull bars closing near their highs.
- The market is Always In Long.
- While the rally appears climactic and overbought, traders will only be willing to sell aggressively once they see bears create strong bear bars with sustained follow-through.
- For now, traders will see whether bulls can create a retest and breakout above the October 29 high with follow-through buying, or if the market will stall around the October 29 area followed by a retest of the November low instead.
- If December closes near its high and at a new all-time high, the yearly candlestick will also close near its high, increasing the odds of at least slightly higher prices in 2026.
The Weekly S&P 500 E-mini chart
- This week’s E-mini candlestick was a bull bar closing near its high.
- Last week, we said traders would watch whether bears could create stronger follow-through selling and push price below the 20-week EMA, or if the pullback would stall around the 20-week EMA followed by a retest of the October 29 high instead.
- Recently, bears produced the first streak of four consecutive bear bodies since February, testing the 20-week EMA.
- They want a reversal from a wedge top (May 19, Jul 31, Oct 29).
- They are looking for a TBTL (Ten Bars, Two Legs) pullback lasting several weeks.
- They see this week as a retest of the prior extreme high (Oct 29) and want the move to form a lower-high major trend reversal or a double top, followed by a second leg sideways to down.
- They want the November 12 high area to act as resistance.
- If the market trades higher, they want a failed breakout above the October 29 high and a higher-high major trend reversal.
- Bulls see the recent selloff (Nov 21) as a pullback. They want the October 10 low and the 20-week EMA to act as support. So far, this is the case.
- They want a retest and breakout above the October 29 high, followed by a resumption of the bull trend from a double bottom bull flag (Oct 10 and Nov 21).
- Bulls hope the pullback has alleviated the recent overbought conditions.
- They need to create strong follow-through buying breaking above the October 29 high to increase the odds of a trend resumption.
- The move up since the April 21 low has been a tight bull channel, reflecting persistent buying pressure.
- The market pulled back to the 20-week EMA recently, and traders are wondering if the move has relieved the overbought conditions.
- Traders will watch the strength of the retest of the all-time high. Will it be strong, with follow-through buying breaking into new all-time highs?
- Or will it be weak — overlapping bars, long upper tails, dojis — forming a lower high instead?
- Since this week closed near its high, the market may gap up next week. Small gaps usually close early.
- For now, traders will watch whether bulls can create a follow-through bull bar next week, or whether the market will trade slightly higher but stall around the November 12 high area instead.
- Odds slightly favor the recent pullback (Nov 21) being minor.
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