E-mini S&P 500 Index

E-mini S&P 500 Index (ES) Futures Technical Analysis – September 26, 2018 Forecast

U.S. stock indexes are trading higher shortly before the release of the U.S. Federal Reserve’s interest rate decision at 1800 GMT. Volume is a little on the low side, however. The broad-based index is being underpinned by strong performances in the communication services and health care sectors. Traders expect the Fed to raise interest rates 25 basis points at this meeting. Furthermore, investors have already priced in an 80-percent chance of an additional rate hike in December.

At 1750 GMT, December E-mini S&P 500 Index futures are trading 2927.75, up 6.50 or +0.22%.

The key to the direction into the close will be the Fed’s comments on the future pace of interest rate hikes. Some investors feel the Fed will become more aggressive. This could cause weakness in the equity markets if interpreted the wrong way.

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, momentum has been trending lower since the formation of the closing price reversal top at 2947.00 on September 21.

A trade through 2947.00 will negate the reversal top and signal a resumption of the uptrend. The main trend will change to down on a trade through 2883.50.

The minor trend is also up. A trade through 2917.75 will change the minor trend to down. This will also confirm the shift in momentum.

The short-term range is 2947.00 to 2917.75. Its 50% level or pivot at 2932.50 is controlling the direction of the index today.

The intermediate range is 2883.50 to 2947.00. Its 50% level or pivot is 2915.25. This pivot is acting like support.

The main range is 2869.50 to 2947.00. Its retracement zone at 2908.25 to 2899.00 is the major support.

Daily Swing Chart Technical Forecast

Based on the early price action, the direction of the December E-mini S&P 500 Index futures contract into the close is likely to be determined by trader reaction to 2932.50.

A sustained move over 2932.50 will indicate the presence of buyers. If this creates enough upside momentum, buyers may take a run at 2947.00 or higher.

A sustained move under 2932.50 will signal the presence of sellers. Look for the selling to accelerate if 2915.25 is taken out.

The big decision for investors will be how to deal with a test of 2908.25 to 2899.00. Since the main trend is up, buyers could come in on test of this zone. Watch for a technical bounce on the first test of this area. But be prepared for the start of a steep sell-off if 2899.00 is taken out with heavy selling pressure.

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.