SPX500 2nd Leg Down? 21 Mar 2025

• Yesterday's candlestick closed as a bull bar in its lower half with a long tail above.
  
• In yesterday's report, we said traders would see if the bulls could create a strong retest of yesterday's (Mar 19) high followed by a breakout above. Or if the retest would lack follow-through buying, stalling around or slightly above yesterday's high area.
  
• The market formed a retest of the March 19 high, but stalled and formed a lower high.
  
• We said the move while strong, likely was simply a bull leg and a buy vacuum test of the trading range high. If true, sellers would emerge near the trading range high, which was the case. (Please refer to the tagged post)
  
• The bulls want the market to form a 2 legged sideways to up pullback.
  
• The pullback is currently underway but has a lot of overlapping candlesticks. The bulls are not yet as strong as they hope to be.
  
• They need to create credible buying pressure - consecutive bull bars closing near their highs to increase the odds of testing the 20-day EMA or the January 13 low.
  
• For today, the market may open lower today. If the market continues down, they hope the March 18 low will act as support, forming a small double bottom bull flag.
  
• 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 9-bar bear microchannel on the daily chart and the 4-bar bear microchannel on the weekly chart increase the odds that the first pullback (current pullback) would be minor and not lead to a reversal up.
  
• They hope the leg to retest the March 13 low will begin soon. They must create strong bear bars with follow-through selling to increase the odds of another leg down.
  
• The prior climactic selloff and parabolic wedge increase the odds of a pullback which is underway.
  
• Traders will see the strength of the pullback. If it is strong (consecutive bull bars closing near their highs), they may look for a retest of the breakout point - Jan 13 low.
  
• If the pullback lacks follow-through buying (overlapping candlesticks, doji bars, bear bars, long tails above bars), the odds of another leg down AFTER the pullback phase increase.
  
• So far, the pullback has a lot of overlapping candlesticks which indicates that the bulls are not yet as strong as they hope to be.
  
• For now, traders will see if the bears can create a strong bear bar today.
  
• Or will the market open lower but lack follow-through selling, like yesterday?
  
• I will update again later today.