Market Overview: S&P 500 Emini Futures

The Emini Strong Bulls formed 3 consecutive bull bars closing near their highs, breaking far above the 20-week EMA and the bear trend line on the weekly chart. They want a resumption of the bull trend. The bears hope to get a reversal from a lower high major trend reversal or a double top.

S&P500 Emini futures

The Weekly S&P 500 Emini chart

• This week’s Emini candlestick was another consecutive bull bar closing near its high.
• Last week, we said that the odds continue to slightly favor the market to trade at least a little higher and traders will see if the bulls can get another follow-through bull bar, closing above the bear trend line.
• This week traded higher, and the bulls got a follow-through bull bar closing far above the bear trend line.
• The bulls see the move down (from July 27) as a deep pullback of the whole move up which started in October 2022.
• They got a reversal from a wedge bull flag (Aug 18, Oct 3, and Oct 27) and a trend channel line overshoot. 
• They then got a strong rally with consecutive bull bars breaking far above the 20-week EMA and the bear trend line.
• The current move-up is in a 4-bar bull microchannel with big bull bars closing near their highs. That means strong bulls.
• If they get a couple of strong consecutive bull bars, the odds of the bull trend resuming will increase. The bull trend may be resuming.
• If the market trades lower, they want a reversal up from a higher low major trend reversal and the 20-week EMA to act as support.
• The bulls will need to create follow-through buying following this week’s close above the bear trend line.
• Previously, the bears got the third leg down forming the wedge pattern (Aug 18, Oct 3, and Oct 27). 
• They wanted a strong breakout below the bull trend line, but the market reversed up with strength instead.
• The bears see the strong rally as a retest of the July 27 high and want a reversal from a lower high major trend reversal or a double top.
• Since this week’s candlestick is a bull bar closing near its high, it is a buy signal bar for next week.
• The market may gap up on Monday. Small gaps usually close early.
• Odds continue to slightly favor the market to still be in the sideways to up phase.
• Traders will see if the bulls can get another follow-through bull bar or will the market trade slightly higher but close as a doji or with a bear body.
• If the market trades slightly lower in the coming weeks, odds slightly favor the bulls to get at least a small second leg sideways to up.

The Daily S&P 500 Emini chart

• The market gapped above the bear trend line on Tuesday followed by sideways to up trading into Friday.
• Last week, we said that the odds slightly favor the market to still be in the sideways to up phase. Traders will see if the bulls can create sustained follow-through trading far above the October high and the bear trend line.
• The bulls saw the previous selloff as a deep pullback of the whole rally which started in October 2022.
• They got a reversal from a wedge bull flag (Aug 18, Oct 3, and Oct 27) and a trend channel line overshoot. 
• The move-up is strong with several big gaps that remained open and in a tight bull channel.
• The next targets for the bulls are the July 27 high and the all-time high.
• They hope that the current rally will form a spike and channel which last for many months.
• If the market trades lower, the odds slightly favor at least a small second leg sideways to up.
• The bears hope that the strong rally is simply a retest of the July 27 high. 
• They want a strong reversal down, like the one in August 2022 following a similar strong rally.
• They want a reversal down from a lower high major trend reversal and a micro double top (Nov 15 and Nov 17).
• For now, the buying pressure remains very strong despite the climactic nature of the move.
• Until the bears can create strong bear bars with sustained follow-through selling, odds continue to favor the market to still be in the sideways to up phase.
• If there is a larger pullback, odds slightly favor at least a small second leg sideways to up after the pullback.

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