E-mini S&P 500 Index

E-mini S&P 500 Index (ES) Futures Technical Analysis – Failure to Hold 3029.50 Will Change Momentum to Down

December E-mini S&P 500 Index futures are inching lower early Wednesday on below average volume as traders position themselves ahead of the release of the U.S. Federal Reserve monetary policy statement and interest decisions at 18:00 GMT. On Tuesday, the index reached another record high, boosted by better-than-expected earnings and improvements on the U.S.-China trade front.

At 06:35 GMT, December E-mini S&P 500 Index futures are at 3033.25, down 2.50 or -0.08%.

Look for the Federal Reserve to cut its benchmark rate by 25 basis points. Economists believe that this will be the third and final cut this year. They expect policymakers to cut in October, pause in December and cut again in March 2020. Some think the central bankers will make a final cut in December then pause. This is why investors will be looking for clues about future Fed policy in the statement and the post-meeting press conference.

E-mini S&P 500 Index
Daily December E-mini S&P 500 Index

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, Tuesday’s closing price reversal top may be signaling a shift in momentum to the downside.

The closing price reversal top is 3046.25. A trade through this top will negate the chart pattern and signal a resumption of the uptrend. A trade through yesterday’s low at 3029.50 will confirm the closing price reversal top. This won’t change the trend to down, but it could signal the start of a 2 to 3 day correction.

Crossing to the weak side of the previous main top at 3032.25 will indicate the buying is getting weaker. A trade through 3020.25 will turn the index lower for the week and put it in a position to post a potentially bearish weekly closing price reversal top.

The first minor range is 2982.00 to 3046.25. Its 50% level is 3014.00. The second minor range is 2975.00 to 3046.25. Its 50% level comes in at 3010.50. Traders should watch for buyers to come in on a test of this area.

Daily Swing Chart Technical Forecast

Based on yesterday’s price action and the current price at 3033.25, the direction of the December E-mini S&P 500 Index on Wednesday is likely to be determined by trader reaction to 3029.50.

Bullish Scenario

A sustained move over 3029.50 will indicate the presence of buyers. If this creates enough upside momentum then look for the rally to possibly extend into this week’s high at 3046.25. This is a potential trigger point for an acceleration to the upside.

Bearish Scenario

Taking out 3029.50 will confirm the closing price reversal top. This could trigger the start of a 2 to 3 day correction with the first two targets the 50% cluster at 3014.00 to 3010.50.

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.