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No Weekly Emini Follow-through Selling

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Market Overview: S&P 500 Emini Futures

There was no weekly Emini follow-through selling as the market formed an ioi (inside-outside-inside) pattern. The bulls must create a strong breakout above the July 31 high with follow-through buying to increase the odds of a measured move. The bears want the market to stall around the July 31 high area, forming a lower high major trend reversal or a double top.

S&P500 Emini futures

The Weekly S&P 500 Emini chart

Emini Weekly - No FT Selling, IOI Pattern, No Weekly Emini Follow-through Selling
  • This week’s Emini candlestick was an inside bull bar closing near its high.
  • Last week, we said traders would see if the bears could create follow-through selling, something they couldn’t do previously (since the April low), or if the market would form a retest of the July 31 high instead.
  • The market formed an ioi (inside-outside-inside) pattern retesting near the July 31 high. There was no follow-through selling (again).
  • The bulls want a resumption of the bull trend.
  • They see the recent move (Aug 1) as a pullback and want the July low or the 20-week EMA to act as support.
  • They want the pullback to be weak with poor follow-through selling (overlapping ranges, bull bars, long tails below candlesticks).
  • They want a Leg 1 = Leg 2 move, which will take the market to the 6800 area (Leg 1 being the Apr 21 low to the May 19 high).
  • They must create a strong breakout above the July 31 high with follow-through buying to increase the odds of a measured move.
  • The bears want a reversal from a higher high major trend reversal and a wedge pattern (May 19, Jul 3, and July 31).
  • At the least, they want a TBTL (Ten Bars, Two Legs) pullback lasting a few weeks.
  • They want the market to stall around the July 31 high area, forming a lower high major trend reversal or a double top.
  • The problem with the bear’s case is that they could not create sustained follow-through selling on the weekly chart since the April 7 low. It was the case again this week.
  • They must create strong consecutive bear bars closing near their lows to show they are back in control.
  • So far, the move up since the April 21 low is in a tight bull channel, indicating strong bullish momentum.
  • The move covered 32% in 4 months. While strong, the move has lasted a long time without any significant pullback. It is slightly climactic and overbought.
  • The market may need form a pullback (trade sideways to down) before the trend resumes.
  • However, the bears need to do more by creating strong consecutive bear bars with follow-through selling to show they are back in control. Without that, traders will not be willing to sell aggressively.
  • The market formed an ioi (inside-outside-inside) breakout mode pattern.
  • The bulls want a breakout above, while the bears want a breakout below the ioi pattern. The first breakout can fail 50% of the time.
  • For now, the market could still trade slightly higher.
  • Traders will see if the bulls can create a strong breakout above the July 31 high with follow-through buying.
  • Or will the market stall around the July 31 high area instead?

The Daily S&P 500 Emini chart

Emini Daily - Bulls Want BO, Bears Want LH MTR
  • The market gapped up on Monday, followed by sideways to up trading for the week.
  • Previously, we said traders would see if the bulls could create more follow-through buying or if the market would stall and form a pullback instead.
  • The market stalled towards the end of July, followed by a pullback (Aug 1), but there was no follow-through selling.
  • The bulls want a measured move (a Leg 1 = Leg 2 move will take the market to the 6800 area – leg 1 being the Apr 21 low to the May 19 high).
  • They want the third leg up to form the larger wedge pattern with the first two legs being May 19 and July 3 highs.
  • They must create sustained follow-through buying breaking above the July 31 high to increase the odds of another leg up.
  • They want the 20-day EMA to act as support.
  • The bears want a reversal from a wedge pattern (May 19, Jul 3, and Jul 31).
  • They see this week as a retest of the prior high (Jul 31) and want a reversal from a lower high major trend reversal or a double top.
  • They see the last 26 trading days forming a possible final flag.
  • They want a TBTL (Ten Bars, Two Legs) pullback lasting a few weeks.
  • They must create consecutive bear bars closing near their lows, trading far below the 20-day EMA to increase the odds of a deeper pullback.
  • The move from the April 21 low is in a tight bull channel, indicating strong bullish momentum.
  • The buying pressure remains stronger (consecutive bull bars) compared to the weaker selling pressure (bear bars with limited follow-through selling).
  • The market could still trade at least a little higher.
  • The market is Always In Long.
  • For now, traders will see if the bulls can create more follow-through buying, followed by a breakout above the July 31 high.
  • Or will the market stall around the July 31 area and followed by another pullback instead?

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