Market Overview: S&P 500 E-mini Futures
The market formed a big monthly E-mini bull bar into new all-time high territory. Bulls need follow-through buying to increase the odds of trend resumption. Bears want the trend channel line to act as resistance. They want any breakout above it to fail within a bar or two, followed by a retest of the bull trend line.
S&P500 E-mini futures
The Monthly E-mini chart
- April formed a big bull bar closing near its high.
- Last month, we said traders would watch whether bears could generate follow-through selling in April, or whether the market would retest the prior high.
- The market traded higher, breaking into new all-time high territory.
- Bulls view the March 30 pullback as a test of the 20-month EMA that has likely relieved the prior overbought condition.
- Bulls want a strong breakout followed by a measured move based on the height of the recent trading range, projecting to around the 7550 area.
- The next target for the bulls is the top of the trend channel line.
- Bulls need follow-through buying to increase the odds of trend resumption.
- Bears got a pullback to the 20-month EMA in March and see the current move as a retest of the prior high.
- While the market could still trade higher, they want a failed breakout forming a reversal bar within a few months.
- They see the April move as part of a climactic rally, with a big bull bar late in a trend.
- If the market trades higher, bears want the trend channel line to act as resistance. They want any breakout above it to fail within a bar or two, followed by a retest of the bull trend line.
- Bears need a strong reversal bar closing near its low to create a short setup.
- The market pulled back to the 20-month EMA and then rallied strongly into a new all-time high.
- The April monthly candlestick closed near its high, increasing the odds of at least slightly higher prices in May.
- Big bull bars late in a trend can be part of a buy climax.
- Traders will watch whether bulls can create follow-through buying in May.
- If the market breaks above the bull trend channel line, traders will watch whether the move is sustainable or lacks follow-through buying.
- If a breakout fails, it typically does so within 2–5 bars.
The Weekly S&P 500 E-mini chart
- This week formed another follow-through bull bar closing in its upper half with a prominent tail above.
- Last week, we said the market could still trade at least a little higher. The strength of the move increases the probability of at least a small sideways-to-up leg after any pullback.
- Bulls have generated a strong rally, with consecutive bull bars closing near their highs and making new all-time highs.
- Bulls want a strong breakout followed by a measured move based on the height of the recent trading range, projecting to around 7550.
- The next target for the bulls is the trend channel line around the 7430 area.
- Bulls want a spike and channel pattern lasting several months.
- If the market pulls back, bulls want the 20-week EMA to act as support.
- They expect at least a small second leg sideways to up to retest the current leg high (May 1) after any pullback.
- Bears see the current move as a buy vacuum retest of the prior high and the trend channel line.
- Bears view the move as a parabolic buy climax and unsustainable without a sideways-to-down pullback.
- Bears want the trend channel line to act as resistance. If the market trades higher, they want the next trend channel line around the 7430 area to act as resistance.
- If the market trades higher, bears want a failed breakout above the trend channel line within a few bars, followed by a retest of the bull trend line.
- Bears want at least a small two-legged sideways-to-down pullback lasting a few weeks.
- Bears need strong bear bars closing near their lows to show control.
- The market has rallied strongly over the past five weeks, with consecutive bull bars closing near their highs.
- The market is Always In Long.
- The last two weeks formed smaller bull bars, indicating slowing momentum.
- Traders will watch whether the market stalls around the current trend channel line or the one above it near 7430.
- For now, the market could still trade at least a little higher. However, because of the climactic nature of the rally, a pullback can occur at any time.
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