Market Overview: S&P 500 E-mini Futures
The S&P 500 E-mini bears want a double top bear flag setup (June 15 and July 10). Bears need consecutive strong bear bars breaking decisively below the 20-week EMA to indicate strength. If the market trades lower, bulls want the June 26 or June 9 lows or the 20-week EMA to act as support, forming a wedge bull flag.
S&P500 E-mini futures
The Weekly S&P 500 E-mini chart
- This week formed an inside bear bar, closing near its low.
- Last week, we said traders would watch whether bulls could create strong follow-through buying to retest the all-time high or whether the market would stall around the June 15 high or the all-time high instead.
- Bulls triggered the High 2 buy setup but were unable to create a follow-through bull bar this week.
- 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 want a retest of the all-time high.
- If the market trades lower, bulls want the June 26 or June 9 lows or the 20-week EMA 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 see the current move as a pullback forming a double top bear flag (June 15 and July 10) and a lower high major trend reversal.
- Bears want the June 15 high to act as resistance.
- 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 bears can create a strong bear entry bar closing far below the 20-week EMA,
- or whether the follow-through selling remains limited, followed by a retest of the June 15 high instead.
- For now, the current pullback is likely to remain minor. However, if the bears can create consecutive bear bars closing near their lows, it could flip the market into Always In Short.
The Daily S&P 500 E-mini chart
- The market traded sideways above the 20-day EMA for most of the week. Friday gapped down at the open and closed in its lower half with a prominent tail above.
- Last week, we said traders would watch whether bulls could generate follow-through buying, breaking strongly above the June 15 high to make a new all-time high, or whether the market would stall around the June 15 high or the all-time high instead.
- 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.
- Bears want a reversal from a double top bear flag (June 15 and July 10) and a smaller wedge bear flag (July 6, July 10, and July 15).
- 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 to flip the market into Always In Short. Without that, traders will be reluctant to sell aggressively.
- 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 current move as a pullback, forming a wedge bull flag (June 9, June 26, and July 17) and a smaller double bottom bull flag (July 8 and July 17).
- Bulls want the pullback to remain weak and sideways, with overlapping candlesticks, bull bars, and prominent lower tails.
- Bulls hope the pullback has alleviated the recent overbought conditions and want a retest and breakout above the all-time high.
- If the market trades lower, bulls want the June 26 or June 9 lows to act as support, forming a wedge bull flag.
- Bulls need consecutive bull bars closing near their highs, breaking strongly above the all-time high to increase the odds of a trend resumption.
- The market traded sideways, forming a triangle pattern following the trend channel line overshoot. A triangle pattern indicates the market is entering breakout mode.
- A failed breakout above a trend channel line can lead to a pullback to test the bull trend line.
- However, if the pullback is weak and sideways, it can indicate strong bulls and increase the odds of a trend resumption after the pullback.
- Traders will watch whether bears can generate strong bear bars to retest the June 26 or June 9 lows, or whether the pullback remains weak and sideways, lacking sustained follow-through selling instead.
- For now, the current pullback is likely to remain minor. However, if bears can generate strong consecutive strong bear bars closing near their lows, it could flip the market into Always In Short.
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