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Emini Bears Need a Strong Bear Entry Bar

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Market Overview: S&P 500 Emini Futures

The S&P 500 Emini bears need a strong bear entry bar trading below the 20-week EMA and the bull trend line to show they are back in control. If the market trades lower, the bulls want the 20-week EMA to act as support.

S&P500 Emini futures

The Weekly S&P 500 Emini chart

Emini Weekly - Bears Need Strong Bear Entry Bar, Emini Bears Need a Strong Bear Entry Bar
  • This week’s Emini candlestick was a small bear reversal bar closing near its low with a prominent tail above.
  • Last week, we said the market could still trade slightly higher. Traders would see if the bulls could create follow-through buying, or if the market would trade slightly higher but stall, forming candlesticks with long tails above or with bear bodies in the weeks ahead.
  • The market traded above last week’s high but reversed to close below it. The bulls were not able to get a follow-through bull bar.
  • They see the selloff (Apr 7) forming a major higher low and the market is in a broad bull channel. They want a resumption of the trend.
  • They want a retest and breakout above the all-time high (Dec 6).
  • If the market trades lower, they want the 20-week EMA to act as support.
  • If the market forms a deeper pullback, they want the 100-week EMA or the April 30 low area to act as support, forming a larger higher low major trend reversal.
  • The bears see the current move as a retest of the prior trend’s extreme high (Dec 6).
  • They want the market to form a lower high major trend reversal or a double top with the December 6 high.
  • They want a reversal from a wedge pattern (May 2, May 19, and Jun 11).
  • They must create strong bear bars trading below the 20-week EMA and the bull trend line to show they are back in control.
  • Since this week’s candlestick was a bear bar closing near its low, it can be a sell signal bar for next week.
  • The market could trade at least a little lower.
  • The market likely has flipped into Always In Long.
  • The buying pressure since the April 7 low has been stronger (strong bull bars closing near their highs) than the weaker selling pressure (bear bar with limited follow-through selling).
  • While the move up is strong, the rally has lasted a long time. The last 5 candlesticks also had overlapping ranges indicating a loss of momentum.
  • The market may have to form a pullback before the move resumes higher again.
  • A pullback can be as small as a 1- or 2-bar move or even a 50% pullback of the whole rally (to around 5500 area).
  • For now, traders will see if the bears can create a strong bear entry bar.
  • Or would the market trade lower, but closes with a long tail below or with a bull body instead?
  • If a pullback forms but is weak and mostly sideways, the odds of another leg up after the pullback will increase.

The Daily S&P 500 Emini chart

Emini Daily - Bears Want TBTL PB, Need FT Selling
  • The market traded sideways to up for most of the week. Friday opened lower and formed a small pullback.
  • Last week, we said traders would see if the bulls could create more follow-through buying, or if the market would stall and form a TBTL (Ten Bars, Two Legs) pullback within the next few weeks instead.
  • Previously, the bulls got a strong reversal in a tight bull channel.
  • They see the selloff forming a major higher low (Apr 7) and want the broad bull channel to continue.
  • They want a retest of the all-time high followed by a breakout above.
  • If the market trades lower, they want the May 23 low or the 20- or 200-day EMA to act as support.
  • If a deeper pullback forms, they want the April 30 low area to act as support.
  • The bears see the current move as a retest of the prior trend extreme high (Dec 6).
  • They want a reversal from a lower high major trend reversal and a wedge pattern (May 2, May 19, and Jun 11).
  • 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 May 23 low and the 200-day EMA to increase the odds of a deeper pullback.
  • The move from the April 21 low is in a tight bull channel which means strong bulls.
  • The market likely has flipped into Always In Long.
  • The rally has lasted a long time and is slightly climactic. A minor pullback could form within the next few weeks.
  • If a pullback forms, traders will see the strength of the move. If it remains shallow and sideways, holding around the 20- or 200-day EMA, the odds of another leg up will increase after the pullback.
  • For now, traders will see if the bears can create strong consecutive bear bars breaking below the 20- or 200-day EMA.
  • Or will the market continue to trade sideways above the 20- or 200-day EMA instead?

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