Market Overview: S&P 500 Emini Futures

The S&P 500 Emini markets formed a weekly Emini retest of an all-time high. The bulls want a breakout into new all-time highs followed by a measured move based on the height of the 21-week trading range. The bears want a reversal from a double top (Dec 6 and Jan 24) and a lower high major trend reversal.

S&P 500 Emini Futures

The Weekly S&P 500 Emini Chart

• This week’s Emini candlestick was a bull bar closing near its high with a long tail below.
• Last week, we said that traders would see if the bulls could create follow-through buying breaking into new all-time high territory or if the market would continue to stall around the upper third of the trading range followed by a bear leg instead.
• The bulls got some follow-through buying this week closing above last week’s high.
• They see the market as being in a broad bull channel and want the market to continue sideways to up for months.
• They see the recent move (to Jan 13) as a two-legged pullback and want the market to resume higher from a double bottom bull flag (Nov 4 and Jan 13).
• They see the move to February 3 as a pullback and want at least another sideways to up leg (the first leg being the Jan 13 low to Jan 24 high move). The second leg is currently underway.
• They want a breakout into new all-time highs followed by a measured move based on the height of the 21-week trading range.
• The bears got a two-legged pullback (Jan 13) but the follow-through selling below the 20-week EMA was limited.
• They got another pullback to the 20-week EMA (Feb 3) but couldn’t trade far below it.
• They see the current move as a retest of the prior trend extreme high (Dec 6) and a bull leg within the 21-week trading range.
• They want a reversal from a double top (Dec 6 and Jan 24) and a lower high major trend reversal.
• If the market trades higher, they want a failed breakout above the all-time high followed by a higher major trend reversal.
• The bears need to do more by creating strong bear bars with follow-through selling to show they are back in control.
• 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 still trade at least a little higher.
• The market remains in a 21-week trading range. The December 6 high could be an area of resistance.
• Traders buying here could be buying near the high of the 21-week trading range, which is not an ideal setup.
• Traders may BLSH (Buy Low, Sell High) within the trading range until there is a breakout from either direction with follow-through buying/selling.
• The buying pressure since the January 13 low is stronger than the selling pressure (all candlesticks have bull bodies).
• If this continues to be the case, we may see a retest of the all-time high followed by a breakout attempt within a few weeks.
• For now, traders will see if the bulls can create more follow-through buying breaking into new all-time territory.
• Or will the market stall around the December 6 high area instead?

The Daily S&P 500 Emini Chart

• The market traded sideways early in the week. Wednesday opened lower but reversed into a bull bar with follow-through buying on Thursday. Friday was a bear doji.
• Last week, we said that traders would see if the bulls could create a retest and a breakout above the all-time high or if the market would stall around the upper third of the 21-week trading range followed by a bear leg testing the January 13 low instead.
• The bulls see the market trading in a broad bull channel and want the move to continue for months. They want an endless pullback bull trend.
• They see the recent sideways trading as a pullback forming a double-bottom bull flag (Jan 27 and Feb 3) or a wedge bull flag (Jan 27, Feb 3 and Feb 12).
• They want a retest of the all-time high (Dec 6) followed by a breakout and trend resumption.
• If the market trades lower, they want the 20-day EMA to act as support.
• The bears want a reversal from a lower high major trend reversal and a double top (Dec 6 and Jan 24).
• They see the market as being in a 21-week trading range. They hope to get a bear leg to retest the January 13 low followed by a breakout below.
• They want the December 6 high area to act as resistance.
• If the market trades higher, they want a failed breakout above the all-time high (Dec 6) and a reversal from a higher high major trend reversal.
• So far, the market is trading in a 21-week trading range.
• The buying pressure since the January 13 low is stronger (consecutive bull bars) compared with the weaker selling pressure (bear bars with limited follow-through selling).
• If the market remains sideways with limited follow-through selling, the odds will swing in favor of a breakout attempt above the all-time high within a few weeks.
• For now, the market could still trade slightly higher.
• Traders will see if the bulls can create a retest and a breakout above the all-time high.
• Or will the market stall around the upper third of the 21-week trading range instead?
• The bears must do more to convince traders they are back in control. They have not yet been able to do so.