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

11/27/2023

3 minutes read

2023.11.27 08:09

Al Brooks

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.