Financial market overview

S&P 500 E-Mini to Test All-Time Highs?

2024.02.05 08:53

Al Brooks

Market Overview: S&P 500 Emini Futures

The month-to-month chart is forming an take a look at all-time excessive. The bulls hope that the market will attain the all-time excessive and get away above. The bears need a reversal from a decrease excessive main pattern reversal or a double high and a big wedge sample (Dec 2, July 27, and Feb 2) forming on the pattern channel line space.

S&P 500 Emini FuturesS&P 500 Emini Futures-Monthly ChartS&P 500 Emini Futures-Monthly Chart

  • The January month-to-month Emini candlestick was one other consecutive bull bar with a outstanding tail above.
  • Last month, we stated that the percentages barely favor January to commerce no less than somewhat increased. The all-time excessive is shut sufficient and may very well be examined in January.
  • January traded increased however didn’t attain the all-time excessive.
  • Previously, the bulls managed to create a decent bull channel from March to July. 
  • That will increase the percentages of no less than a small second leg sideways to up after the July to October pullback. The second leg up is at present underway.
  • February has traded above the January excessive. The bulls hope that the market will attain the all-time excessive and get away above.
  • The bears see the present rally as a retest of the January 2022 all-time excessive and need a reversal from a decrease excessive main pattern reversal or a double high.
  • They additionally see a big wedge sample (Dec 2, July 27, and Feb 2) forming on the pattern channel line space.
  • Because of the sturdy rally within the final 3 months, they may want a powerful sign bar or a micro double high earlier than merchants could be prepared to promote extra aggressively.
  • If February stalls across the January excessive space or barely above, it may well kind a micro double high.
  • Since January closed above the center of its vary, it’s a purchase sign bar albeit weaker.
  • For now, odds barely favor February to commerce no less than somewhat increased which it has executed. 
  • The market stays Always In Long and the bull pattern stays intact (increased highs, increased lows).
  • However, the rally has additionally lasted a very long time and is barely climactic. 
  • A minor pullback can start inside a number of months earlier than the market resumes increased.

S&P 500 Emini-Weekly ChartS&P 500 Emini-Weekly Chart

  • This week’s Emini candlestick was an outdoor bull bar closing close to its excessive with an extended tail under.
  • Last week, we stated that the percentages barely favor the market to nonetheless be Always In Long. Traders will see if the bull can create one other follow-through bull bar and resume the transfer increased.
  • The bulls proceed to get follow-through shopping for above the December 28 excessive.
  • The transfer up since October is in a decent bull channel. That means sturdy bulls.
  • The subsequent goal for the bulls is the all-time excessive. They need a sturdy breakout into a brand new all-time excessive territory, hoping that it’ll lead to many months of sideways to up buying and selling. 
  • Swing bulls would proceed to maintain their lengthy place established at decrease costs believing any pullback possible to be minor and the market has transitioned right into a bull channel section.
  • The bears hope that the sturdy rally is just a buy-vacuum take a look at of what they consider to be a 38-month buying and selling vary excessive.
  • They need a reversal from a decrease excessive main pattern reversal (with the all-time excessive) and a big wedge sample (Feb 2, July 27, and Feb 2) from across the pattern channel line space.
  • They hope to get no less than a TBTL (Ten Bars, Two Legs) pullback. 
  • The drawback with the bear’s case is that the rally may be very sturdy. The solely bear bar within the rally had no follow-through promoting.
  • They would want a powerful reversal bar, a micro double high or an inexpensive sign bar for a Low 2 setup earlier than they’d assume to promote aggressively.
  • The bears hope subsequent week will kind an inside bear bar, forming an ioi (inside-outside-inside) adopted by a breakout under, starting the TBTL pullback section.
  • If the market trades increased, the bears need the Emini to stall across the pattern channel line space or the all-time excessive space.
  • Since this week’s candlestick is an outdoor bull closing close to its excessive, it’s a purchase sign bar for subsequent week.
  • Sometimes the candlestick after an outdoor bar is an inside bar, forming an ioi (inside-outside-inside) sample, a breakout mode sample.
  • While the market continues to be Always In Long, the rally has lasted a very long time and is barely climactic.
  • Traders anticipate a minor pullback (even when it lasts for weeks) and are searching for indicators of this. 
  • Traders will see if the bull can create one other follow-through bull bar and resume the transfer increased. Or will the market stall across the pattern channel line space?

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