Emini Higher Low, Strong Bull Bar

Market Overview: S&P 500 Emini Futures

The weekly chart was a strong bull bar and the bulls hope that the S&P 500 Emini futures market is forming a higher low followed by another strong leg up. The bulls will need to create strong follow-through buying to increase the odds of a retest of the February 2 high. The bears hope that the Emini is simply retesting the February 2 high and want a reversal down from a lower high major trend reversal or a double top.

S&P500 Emini futures

The Monthly Emini chart

Emini Monthly: Feb Bear Reversal Bar, Trading Range and strong bull bar.

The February monthly Emini candlestick was a bear reversal bar closing below the 20-month exponential moving average.
Last month, we said that the odds favor an upside breakout above January and traders will see if the bulls can create a follow-through bull bar. Or if the Emini trades slightly higher, but reverses to close as a bear bar below the 20-month exponential moving average.
The bulls see the selloff from January 2022 as a wedge bull flag (February 24, June 17 and October 13).
They got a second leg sideways to up in February, but it reversed into a bear bar.
They failed to get a follow-through bull bar and the Emini is stalling around the 20-month exponential moving average.
The bulls want March to close with a bull body closing near its high.
They have a 5-bar bull microchannel. Often, there are buyers below the first pullback below such a strong microchannel.
The move down since January 2022 had a lot of overlapping bars. The bears are not yet as strong as they hope to be.
They see the move down from January 2022 as a broad bear channel, with the August 2022 high as the last lower high.
While the bulls have broken the bear trend line, the bears hope that the recent move up is simply forming another lower high (to Aug 2022) with a flatter trend line.
If the Emini trades higher, they want a reversal lower from a double top bear flag with August 2022 high and a lower high major trend reversal.
While March has traded slightly below the February low, some bears may feel that the February low may not have been adequately tested.
The bears want a retest of the March low after the current pullback (bounce).
The candlesticks in the last 9 months are overlapping which means the Emini likely has transitioned into a trading range phase between 4300 and 3500.
The last 4 candlesticks had overlapping bodies with alternating bull and bear bodies. The Emini is in a tight trading range.
Poor follow-through and reversals are more likely within a trading range.
Traders will BLSH (Buy Low, Sell High) until there is a breakout from either direction.
Until the bulls can break far above the August 2022 high, the broad bear channel may still be in play.

The Weekly S&P 500 Emini chart

This week’s Emini candlestick was a strong bull bar reversal closing near its high with a long tail below.
Last week, we said that odds slightly favor the Emini to trade at least a little lower and traders will see if the bears can continue to create strong bear bars, or will the Emini stall at a higher low potentially setting up another third leg up.
This week broke below last week’s low but reversed to close as a bull reversal bar.
The bears see the move up to February 2 high simply as a two-legged swing up.
They want a reversal down from a higher high major trend reversal.
If the Emini trades higher, they want a reversal down from a lower high major trend reversal or a double top with February 2 high.
While some traders may view December high as a major lower high, the bears want a break above the August high to be sure of the end of the bear trend.
The bears want a retest of the October low followed by a strong breakout and a continuation of the bear trend.
The bulls see the last 8 months as forming an inverted head and shoulders, with the December low being the right shoulder.
However, an inverted head and shoulders pattern often ends up as a bear flag instead of a reversal pattern.
The bulls hope that the current pullback will form a higher low, followed by another leg up forming a wedge pattern with the first two legs being December 1 and February 2.
By breaking above the December high, they hope the bear trend of successively lower highs and lower lows has ended.
They need to break far above the December high and August high to signal the end of the selloff.
After the spike and broad channel down from January 2022, the Emini may have transitioned into a trading range phase between 4300 and 3500.
Traders will BLSH (Buy Low, Sell High) until there is a breakout from either direction.
The move up from October 2022 may simply be a bull leg within a trading range.
Since this week was a bull bar closing near the high, odds favor the Emini to trade at least a little higher.
Traders will see if the bulls can create a strong follow-through bull bar or if next week trades slightly higher but stalls and closes as a bear bar or a doji with a long tail above.

Trading room

Al Brooks and other presenters talk about the detailed Emini price action real-time each day in the BrooksPriceAction.com trading room. We offer a 2 day free trial.