E-mini S&P 500 Index (ES) Futures Technical Analysis – July 26, 2016 Forecast

September E-mini S&P 500 Index futures are trading slightly lower shortly before the cash market opening. The index produced a closing price reversal top on Monday. A trade through 2155.75 will confirm the chart pattern. This could lead to the start of a 2 to 3 day sell-off.

The main trend is up according to the daily swing chart. A trade through 2172.50 will reaffirm the uptrend. A trade through 2142.75 will turn the minor trend down.

The short-term range is 2142.75 to 2172.50. Its 50% level or pivot is 2157.50. This price appears to be controlling the short-term direction of the market. Buyers are coming in at this level to support the uptrend so it is going to take a wave of selling pressure to take out this level.

The main range is 2065.75 to 2172.50. Its retracement zone is 2119.00 to 2106.50.

Based on Monday’s close at 2162.25 and the earlier price action, it looks as if traders are reacting to 2157.50.

A sustained move over 2157.50 will indicate the presence of buyers. This could generate enough upside momentum to challenge yesterday’s high at 2172.50, followed closely by a steep uptrending angle at 2177.75. Overtaking this angle will put the index in a bullish position.

A sustained move under 2157.50 will signal the presence of sellers. The daily chart is open under this angle with the first target the minor bottom at 2142.75. This is followed by a long-term uptrending angle at 2141.50. This angle is the trigger point for the start of a steep break with the next target coming in at 2121.75.

Watch the price action and read the order flow at 2157.50 today. Trader reaction to this level should tell us if the buyers are still coming in to support the market or if sellers are taking control. Taking out 2155.75 will confirm the reversal top which could provide some relief to a seemingly overbought market.