E-mini S&P 500 Index

E-mini S&P 500 Index (ES) Futures Technical Analysis – Approaching Major Target Zone at 4439.50 – 4416.00

December E-mini S&P 500 Index futures are trading a little higher shortly before the mid-session in a volatile session. The benchmark index opened strong, hit minor resistance then sold off enough to turn the index lower for the session. Prices then rebounded as the market neared major retracement zone support.

At 15:41 GMT, December E-mini S&P 500 Index futures are trading 4451.75, up 2.75 or +0.06%.

Traders blamed a sell-off in the technology sector for the weakness. Meanwhile, the Dow held on to its gains. This suggests investors were selling overvalued technology shares.

The likely catalyst behind the intraday sell-off was the release of the House Democrats outline for tax increases they aim to use to offset up to $3.5 trillion in spending on the social safety net and climate policy.

Daily December E-mini S&P 500 Index

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 4539.50 will change the main trend to up.

The minor trend is also down. A trade through 4519.75 will change the minor trend to up. This will shift momentum to the upside.

The main range is 4339.75 to 4539.50. Its retracement zone at 4439.50 to 4416.00 is the primary downside target and value zone. Look for aggressive counter-trend buyers on the first test of this area. If it fails then look out to the downside.

The minor range is 4519.75 to 4442.25. Its 50% level at 4481.00 is the first upside target.

The second minor range is 4539.50 to 4442.25. Its retracement zone at 4491.00 to 4502.50 is the next potential upside target.

Daily Swing Chart Technical Forecast

The direction of the December E-mini S&P 500 Index into the close on Monday will be determined by trader reaction to 4449.00.

Bullish Scenario

A sustained move over 4449.00 will indicate the presence of aggressive counter-trend buyers. If this move creates enough upside momentum then look for a drive into a series of minor 50% levels at 4463.00, 4481.00 and 4491.00. These level will move lower throughout the session if the index continues to make new intraday lows.

Bearish Scenario

A sustained move under 4449.00 will signal the presence of sellers. This could lead to a test of 4439.50. Watch for a technical bounce on the first test of this level. If it fails then the Fibonacci level at 4416.00 will become the next downside target. Once again, look for buyers on a test of this level.

If 4416.00 is taken out with heavy selling pressure then look for an acceleration to the downside with 4339.75 the next major target.

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Published by

James Hyerczyk

James A. Hyerczyk has worked as a fundamental and technical financial market analyst since 1982. His technical work features the pattern, price and time analysis techniques of W.D. Gann.