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E-mini Formed a Breakout Below the November Low

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Market Overview: S&P 500 E-mini Futures

The S&P 500 E-mini formed a breakout below the November low. Bears need to generate sustained follow-through selling to confirm the breakout. Bulls see the move as a deep pullback testing the December 6, 2024 breakout point and want this area to act as support.

S&P500 E-mini futures

The Weekly S&P 500 E-mini chart

E-mini Weekly - Breakout Below Larger Trading Range, E-mini Formed a Breakout Below the November Low
  • This week’s Emini candlestick is a strong bear bar closing near its low, with a small tail below.
  • Last week, we said traders would watch whether bears could generate a strong breakout below the November low with sustained follow-through selling, or if the market would find support there and pull back to retest the middle of the range around the 20-week EMA.
  • The market traded higher early in the week but reversed midweek, breaking strongly below the November low on Friday.
  • Bears achieved a breakout below the tight trading range and a measured move target near 6,500 based on the height of the 13-week range.
  • Next, they want a larger measured move based on the broader range (November 21 low to January 28 high), projecting toward the 6,200 area.
  • Bears got a strong breakout below the November low this week and need to generate sustained follow-through selling to confirm the breakout.
  • They hope the market has flipped into Always In Short.
  • Bears want any pullback to be weak, forming lower highs and continuing the 4-bar bear microchannel.
  • If the market trades higher, they want the 20-week EMA to act as resistance, forming a lower high major trend reversal followed by a second leg sideways to down.
  • Bulls see the move as a deep pullback testing the December 6, 2024 breakout point and want this area to act as support.
  • They want the breakout below the November low to be brief and lack follow-through selling, resulting in a failed breakout.
  • Bulls need consecutive strong bull bars to show they have regained control.
  • So far, the market continues to trade lower with follow-through selling below the 20-week EMA.
  • This week formed a strong bear breakout bar below the November low.
  • Because it is a bear bar closing near its low, the market could gap down next week. Small gaps often close early.
  • If a gap remains open, it may signal bearish strength and form a possible measuring gap.
  • Traders are watching whether bears can generate strong follow-through selling next week. If they do, the odds of a larger sustained move lower increase.
  • Or will the move lack follow-through selling, followed by a pullback to retest the 20-week EMA in the weeks ahead instead?

The Daily S&P 500 E-mini chart

E-mini Daily - Breakout Below Larger Trading Range
  • The market gapped up and traded higher early in the week but did not reach the 20-day EMA. It then reversed midweek and broke below the November low.
  • Last week, we said traders would watch whether bears could generate a strong breakout below the November low and the 200-day EMA with sustained follow-through, or if the market would stall around that area.
  • Bulls want the November 21 low or the 200-day EMA to act as support.
  • They want the breakout below the November 21 low to be brief and lack follow-through, resulting in a failed breakout.
  • Bulls see a wedge pattern (March 3, March 9, and March 20) and a trend channel line overshoot (March 20).
  • They want at least a two-legged sideways to up pullback to the 20-day EMA.
  • If the market trades lower, they want the August 1 low to act as support.
  • Bulls need consecutive strong bull bars to show they have regained control.
  • Bears got a strong breakout below the 13-week tight trading range, with a measured move target near 6,500 based on the range height.
  • Next, bears want a larger measured move based on the broader range (November 21 low to January 28 high), projecting toward the 6,200 area.
  • Bears want the market to continue forming lower highs, with the 20-day EMA acting as resistance, which is the case so far.
  • If the market trades higher, bears want a weak pullback — overlapping candles with prominent upper tails — forming a lower high major trend reversal and a larger second leg sideways to down.
  • Bears need follow-through selling after Friday’s breakout below the November low to increase the odds of a sustained move.
  • The leg down from the March 17 high formed consecutive micro gaps with little overlap, indicating accelerating selling pressure.
  • The market may have flipped into Always In Short.
  • Traders are watching whether bears can generate sustained follow-through selling after the breakout below the November low and the 200-day EMA, or if the market quickly reverses back into the trading range.
  • If the market trades higher but continues forming slightly lower highs — with prominent bear bars, weak bull bars, and tails above, stalling around the 20-day EMA — the odds of a downside breakout increase. This remains the case so far.

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