Introduction
The S&P 500 e-mini futures (ES) have painted two bearish candles for the past two weeks trade. This was overdue as ES and other US equity markets have soared for 2024. The pullback we expect is likely to be a short-term outlook and by no means a trend reversal, so keep that in mind while we do our technical analysis.
Weekly Chart
Firstly, the candlesticks are bearish. You can see the two bearish wicks where bulls have tried to push prices higher but have failed. This has lead to the bearish formation known as the tweezor top.
Tweezer tops are great trading opportunities because of the high probability of success as well as the easy placement of the stop loss, which is placed just above the high of the candlestick pattern.
Wait to see if prices fall below the low of last week’s close; that will be the short entry. Targets of $5,300 are reasonable from there.
The RSI also has a bearish divergence, as you can see on our technical analysis chart. This gives further conviction to the bear case.
