E-mini S&P 500 Index

E-mini S&P 500 Index (ES) Futures Technical Analysis – Confirmed Reversal Top Shifts Momentum to Downside

September E-mini S&P 500 Index futures finished sharply lower on Friday with the broad sell-off blamed on weak earnings, surging coronavirus cases and geopolitical uncertainties.

The S&P Tech Sector weighed heaviest on the benchmark index, led by a decline by Intel Corp. Shares of the chipmaker plunged after reporting a delay in production of a smaller, faster 7-nonometer chip.

On Friday, September E-mini S&P 500 Index futures settled at 3204.00, down 23.50 or -0.73%.

In other news, more than 1,000 Americans died from COVID-19 on Thursday, the third straight day for that grim milestone as total cases surged past 4 million. Meanwhile, Beijing fired back at Washington shuttering China’s Houston consulate by closing the U.S. consulate in the city of Chengdu.

Daily September E-mini S&P 500 Index

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum shifted to the downside with the formation of the closing price reversal top on July 23 and its subsequent confirmation on Friday.

A trade through 3284.50 will negate the closing price reversal top and signal a resumption of the uptrend. The main trend changes to down on a move through the last main bottom at 3105.25.

The minor trend is also down. This confirms the shift in momentum.

The minor range is 3188.50 to 3284.50. Its 50% level at 3236.50 is resistance.

The short-term range is 3105.25 to 3284.50. Its retracement zone at 3194.75 to 3173.75 is potential support.

A second short-term range is 2983.50 to 3284.50. Its retracement zone at 3134.00 to 3098.50 is another potential support area.

Short-Term Outlook

Since investors have been buying breaks into retracement zones, we’re going to be watching the price action and order flow at 3194.75 to 3173.75 early Monday.

If 3173.75 fails to hold then our next downside target zone becomes 3134.00 to 3098.50. This zone is most important because it is the last potential support zone before the main bottom at 3105.25. Buyers are likely to come in to defend the trend on a test of this zone.

If 3098.50 fails then look out to the downside. The next major support comes in at 2983.50.

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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.