Stock Market

E-mini S&P 500 Index (ES) Futures Technical Analysis – Weekly Pivot at 2748.50

December E-mini S&P 500 Index futures closed sharply higher last week. The price action suggests investors are most interested in two factors, lower interest rates and a new trade deal with China. Most of last week’s rally was fueled by dovish remarks from U.S. Federal Reserve Chair Jerome Powell, who said that the central bank is nearing neutral. He also suggested a slower pace for future rate hikes. The market was also driven higher by optimism that U.S. President Trump and China’s President Xi Jinping would reach a deal to possibly end the trade war.

Last week, the December E-mini S&P 500 Index settled at 2758.25, up 128.75 or +4.90%.

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

Weekly Swing Chart Technical Analysis

The main trend is down according to the weekly swing chart. A trade through 2603.00 will signal a resumption of the downtrend. This is followed by a pair of bottoms at 2562.50 and 2550.00. The main trend will change to up on a move through 2947.00.

The minor trend is also down. A trade through 2818.00 will change the minor trend to up. A trade through 2626.00 will signal a resumption to the downtrend.

The main retracement zone is 2748.50 to 2701.75. This zone is controlling the longer-term direction of the index. The close on the strong side of this zone is helping to give the market an upside bias.

The short-term range is 2947.00 to 2603.00. Its retracement zone at 2775.00 to 2815.50 is the next upside target. Overcoming this zone will put the index in a bullish position.

Weekly Swing Chart Technical Forecast

Based on last week’s close at 2758.25, the direction of the December E-mini S&P 500 Index this week is likely to be determined by trader reaction to the 50% level at 2748.50.

Bullish Scenario

A sustained move over 2748.50 will indicate the presence of buyers. If this move generates enough upside momentum then look for the rally to extend into the next 50% level at 2775.00. This is followed by the resistance cluster at 2815.50 to 2818.00.

The weekly chart is wide open over 2818.00 with 2947.00 the next major upside target so be prepared for an acceleration to the upside when it’s tested.

Bearish Scenario

A sustained move under 2478.50 will signal the presence of sellers. This could lead to a spike into 2701.75. This is a potential trigger point for an acceleration to the downside with potential targets coming in at 2626.00 and 2603.00. This is followed by a pair of former bottoms at 2562.50 and 2550.00.

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.