S&P 500 E-Mini Follow-Through Bull Bar

2023.11.27 08:09

Market Overview: S&P 500 E-mini Futures

The weekly chart formed an  follow-through bull bar following the breakout above the bear trend line. The next target for the bulls is the July 27 high. The bears want a reversal from a lower high major trend reversal or a double top with either the September 1 or July 27 high.

S&P 500 E-mini FuturesS&P 500 Emini-Weekly Chart

• This week’s E-mini candlestick was another consecutive bull bar closing near its high.
• Last week, we said that the odds continue to slightly favor the market to still be in the sideways to up phase. 
• This week traded slightly higher in a shortened week.
• 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 5-bar bull microchannel with bull bars closing near their highs. That means strong bulls.
• The next target for the bulls is the July 27 high, a logical area for protective stops for the bears.
• If a pullback begins, the bulls want it to be sideways and shallow, with doji(s), overlapping bars and candlesticks with long tails below.
• If there is a deep pullback, they want a reversal up from a higher low major trend reversal and the 20-week EMA to act as support.
• The bears see the strong rally simply as a retest of the July 27 high.
• They hope that the move is simply a buy-vacuum test of what they believe to be a 36-month trading range high.
• They want a reversal from a lower high major trend reversal or a double top with either the September 1 or July 27 high.
• The problem with the bear’s case is that the current rally is very strong. 
• They will need to create strong bear bars with sustained follow-through selling to increase the odds of a deeper pullback.
• Since this week’s candlestick is a bull bar closing near its high, it is a buy signal bar for next week.
• Odds continue to slightly favor the market to still be in the sideways to up phase.
• However, the move has lasted a long time and is slightly climactic. A minor pullback can begin within a few weeks.
• Odds favor the first pullback to be minor. If there is a deeper pullback, odds slightly favor at least a small second leg sideways to up.
• 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, beginning the minor pullback phase.

S&P 500 Emini-Daily Chart

• The market traded sideways to up for the week.
• Last week, we said that the odds continue to favor the market to still be in the sideways to up phase.
• The bulls 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 after a pullback.
• They want a painful short squeeze (to the bears) that will fuel the move higher.
• The next target for the bulls is the July 27 high, a logical area for protective stops for the bears.
• If a deeper pullback begins, the bulls want the 20-day EMA to act as support.
• 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 double top with the September 1 or July 27 high.
• For now, the buying pressure remains very strong. Odds continue to favor the market to still be Always In Long.
• However, the move is slightly climactic. A minor pullback can begin at any moment. Odds favor the first pullback to be minor. 
• 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 with pullbacks in between.

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