March E-mini S&P 500 Index futures are called lower shortly before the cash market opening. There was very little follow-through to the upside earlier today after yesterday’s massive short-covering rally. Sellers came in early and buyers had very little opportunity to continue the rally. The market is now poised to retrace the two-day rally.
At 1357 GMT, March E-mini S&P 500 Index futures are trading 2432.00, down 39.00 or -1.58%.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. Yesterday’s rally did nothing to change the trend, but it did produce a closing price reversal bottom. The chart pattern was confirmed earlier today but the buying was weak, leading to today’s intraday weakness.
A trade through 2316.75 will negate the closing price reversal bottom and signal a resumption of the downtrend. The main trend changes to up on a trade through 2690.50.
The main range is 2690.50 to 2316.75. Its retracement zone at 2503.75 to 2547.75 is the primary upside target. Trader reaction to this zone will determine the near-term direction of the market.
The new short-term range is 2316.75 to 2481.50. Its 50% level at 2399.00 is the primary downside target. This level is very important because aggressive counter-trend buyers could come in on a test of this level in an effort to form a secondary higher bottom.
The major support zone is 2368.50 to 2231.00. This is a long-term 50% to 61.8% retracement zone.
Daily Swing Chart Technical Forecast
Based on the early price action, the direction of the March E-mini S&P 500 Index the rest of the session is likely to be determined by trader reaction to today’s intraday high at 2481.50.
Taking out 2481.50 and sustaining the move will indicate the return of buyers. This could drive the index into the retracement Zone at 2503.75 to 2547.75. Since the main trend is down, sellers are likely to come in on a test of this zone. Taking out 2547.75 will change the near-term sentiment to bullish.
A sustained move under 2481.50 will signal the return of sellers. If this move creates enough downside momentum then look for the selling to extend into the short-term pivot at 2399.00. We could see a technical bounce on the first test of this level if aggressive counter-trend buyers re-emerge.
If 2399.00 fails as support then look for the selling to extend into the longer-term 50% level at 2368.50. Buyers could come in again on a test of this level, but if it fails then look for a drive through the new main bottom at 2316.75 with the January 31, 2017 main bottom at 2275.75 the next target.