26/3/25 Bulls Need Follow-through, or Stall at 20-Day EMA?

• The market tested the 20-day EMA and the January 13 low in the last 2 trading days.
  
• In our last report, we said the buying pressure is stronger than the selling pressure (bear bars with no follow-through selling) and the odds slightly favor the market to still be in the sideways to up pullback phase.
  
• The bulls want the market to form a 2 legged sideways to up pullback testing the 20-day EMA, 200-day EMA or the January 13 low. They got what they wanted.
  
• The pullback currently has more bull bars vs bear bars with no follow-through selling. The bulls are stronger.
  
• The market has formed 3 pushes up, therefore a wedge (Mar 17, Mar 19, and Mar 15).
  
• If there is a pullback, the bulls want at least a small sideways to up leg to retest the current leg high (Mar 25) after that, forming a larger double top bear flag.
  
• The bulls must continue creating follow-through buying above the 20-day EMA to increase the odds of testing the March 3 high (start of the bear channel).
  
• The bears see any pullback as minor. They expect at least a small second leg sideways to down to retest the Mar 13 low after the pullback phase.
  
• The strong move down slightly favor the first pullback to be minor and not lead to a reversal up.
  
• They must create strong bear bars with follow-through selling to show that they are back in control.
  
• They want the 20-day EMA and the Jan 13 low to act as resistance.
  
• The prior climactic selloff and parabolic wedge increase the odds of a pullback which is underway.
  
• For now, traders will see if the bulls can continue to create follow-through buying above the 20-day EMA, or will the market stall around the current levels instead?
  
• If there is a pullback, traders will see if the bulls can create a retest of the current leg high (now Mar 25) and the strength of the retest.
  
• If it is weak and is a lower high, another sideways to down leg to retest the March 13 low will increase.
  
• For now, the market may still be in the sideways to up pullback phase.
  
• But the wedge pattern is increasing the odds of a small pullback.