The Emini reversed down from a failed breakout of the all time high, and nested wedge reversal. There are trapped bulls who bought the May 3rd high who want out. Most bulls used the new high to take profits as the market is likely to transition into a trading range over the next few months or even years. However this does not mean the bulls will not get another test of the high, eventually. But the strong bull trend is less likely to resume, and instead prices will likely remain in a large bull flag trading range, where bulls and bears buy low and sell high.
Bull gaps are starting to be filled (Mar 29), which is a sign of trading range behavior. The bulls need to keep the Mar 11 gap open to prevent the bears from gaining strength. The bulls want to form a double bottom around here or the previous swing low around 2725. If the bulls are unable to form a double bottom or higher low, the bears will likely get a test of the Jan 29 micro double bottom which is the start of the tight bull channel .
There has been some signs of buying pressure over the past two weeks or so (tails below bars, bears lacking strong closes). Yesterday closed on its low, but this was likely due to a magnet affect testing the small micro double bottom from March. However, the bears will likely get some form of a second leg down from the wedge . If the bears can prevent the bulls from reaching the May 3rd close, they will have an increased chance of a large sell off and test of the December low, and bottom of the developing trading range.
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