Market Overview: S&P 500 E-mini Futures
This week triggered the Emini High 2 buy setup on the weekly chart. Bulls need sustained follow-through buying to increase the odds of a trend resumption. Bears want the June 15 high to act as resistance, forming a double top bear flag and a lower high major trend reversal.
S&P500 E-mini futures
The Weekly S&P 500 E-mini chart
- This week formed a bull bar, closing near its high with a prominent lower tail.
- Last week, we said traders would watch whether bulls could create strong bull bars to retest the all-time high or whether the attempt to resume the trend was weak, stalling around the June 15 high area instead.
- Bulls want a measured move to around 8000, based on the height of the initial spike (from the March 30 low to the April 17 high).
- Bulls see the recent move as a two-legged pullback, forming a double bottom bull flag (June 9 and June 26).
- Bulls want the pullback to remain weak and sideways, lacking follow-through selling, with overlapping candlesticks and prominent lower tails.
- Bulls hope the pullback has alleviated the recent overbought conditions and now want a retest of the all-time high.
- Bulls triggered the High 2 buy setup this week and need sustained follow-through buying to increase the odds of a trend resumption.
- If the market trades lower, bulls want the June 26 low to act as support, forming a wedge bull flag.
- Bears want a reversal from a trend channel line overshoot, followed by a test of the April 23 low or the bull trend line.
- Bears want a two-legged sideways-to-down pullback lasting several weeks. The minimum requirement has been met.
- The problem with the bears’ case is that the follow-through selling has been limited so far.
- Bears want the June 15 high to act as resistance, forming a double top bear flag and a lower high major trend reversal.
- If the market trades higher, bears want the all-time high to act as resistance, forming a higher high major trend reversal.
- Bears need consecutive strong bear bars breaking decisively below the 20-week EMA to indicate strength. Without that, traders will be reluctant to sell aggressively.
- The market broke above the trend channel line, followed by a pullback lasting several weeks.
- Failed breakouts above a trend channel line can lead to a test of the bull trend line.
- However, if the pullback remains mostly sideways, with overlapping candlesticks and prominent lower tails, it can indicate strong bulls and increase the odds of trend continuation after the pullback.
- Traders will watch whether bulls can create strong follow-through buying to retest the all-time high, followed by a breakout above.
- Traders will also watch whether the market stalls around the June 15 high area or the all-time high area instead.
- For now, the current pullback is likely to remain minor.
The Daily S&P 500 E-mini chart
- The market formed a pullback testing the 20-day EMA on Wednesday, followed by three consecutive bull bars closing near their highs.
- Previously, we said traders would watch whether bears could create consecutive strong bear bars breaking decisively below the June 9 low or whether the market would stall around the June 9 low area, forming a double bottom bull flag followed by a move higher within the next few weeks.
- Bears created a two-legged pullback following the wedge top (May 1, May 14, and June 1) and a higher high major trend reversal (June 1).
- Bears want a failed breakout above the trend channel line, followed by a pullback to test the April 23 low area or the bull trend line.
- Bears see the current move as a retest of the prior high and want the June 15 high to act as resistance, forming a double top bear flag.
- If the market trades higher, bears want the all-time high to act as resistance, forming a higher high major trend reversal.
- Bears need consecutive strong bear bars closing near their lows and breaking decisively below the June 9 low to show control. Without that, traders will be reluctant to sell aggressively.
- Previously, bulls generated a strong spike-and-channel bull trend.
- Bulls want a measured move to around 8000, based on the height of the initial spike (from the March 30 low to the April 17 high).
- Bulls view the recent move as a two-legged pullback, forming a double bottom bull flag (June 9 and June 26).
- Bulls want the pullback to remain weak and sideways, with overlapping candlesticks, bull bars, and prominent lower tails. So far, this appears to be the case.
- Bulls hope the pullback has alleviated the recent overbought conditions and now want a retest and breakout above the all-time high.
- If the market trades lower, bulls want the June 26 low to act as support, forming a wedge bull flag.
- Bulls need sustained follow-through buying to increase the odds of a trend resumption.
- The market formed a two-legged sideways-to-down pullback following the trend channel line overshoot.
- A failed breakout above a trend channel line can lead to a pullback to test the bull trend line.
- However, if the pullback remains weak and sideways, it can indicate strong bulls and increase the odds of a trend resumption after the pullback.
- Traders will watch whether bulls can generate follow-through buying, breaking strongly above the June 15 high to make a new all-time high.
- Traders will also watch whether the market stalls around the June 15 high or the all-time high area instead.
- For now, the current pullback is likely to remain minor.
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