E-mini S&P 500 Index (ES) Futures Technical Analysis – October 24, 2016 Forecast

December E-mini S&P 500 Index futures mounted a strong recovery from early session weakness on Friday, but still closed lower for the session. The price action last week suggests that investors aren’t too excited about either direction at this time. Investors also seem to be more reactive than proactive, a sign of indecision.

Traders seem to be sensitive to earnings reports, the election, the economy, Fed policy and oil prices. Today, they will get an opportunity to react to comments from three Fed speakers. This could cause volatility especially if they talk about the timing of the next Fed rate hike. Don’t expect the price action to get too out of control this week and don’t be surprised by below average volume as investors prepare for Friday’s Advance GDP report.

Technical Analysis

The main trend is down according to the daily swing chart. It will turn up on a trade through 2168.25. A move through 2107.75 will signal a resumption of the downtrend.

The minor trend is up. A trade through 2144.50 will reaffirm the uptrend. A move through 2116.75 will turn the minor trend to down.

The main range is 2182.75 to 2100.25. Its retracement zone is 2141.50 to 2151.25. This zone is controlling the longer-term direction of the market. The lower or 50% price at 2141.50 has provided support several times over the past week.

The short-term range is 2107.75 to 2144.50. Its retracement zone at 2126.00 to 2121.75 is controlling the short-term direction of the market. It provided support on Friday when the index made its low at 2123.25.

Forecast

Based on Friday’s close at 2134.75, the direction of the market today is likely to be determined by trader reaction to the steep uptrending angle at 2135.75.

A sustained move over 2135.75 will indicate the presence of buyers. This could create enough upside momentum to challenge the main 50% level at 2141.50. Taking out this level could trigger an acceleration into a long-term downtrending angle at 2150.75 and the main Fibonacci level at 2151.25.

A sustained move under 2135.75 will signal the presence of sellers. The first downside target is a long-term uptrending angle at 2130.25. This is followed by the short-term retracement zone at 2126.00 to 2121.75.

The index opens up to the downside on a move through the uptrending angle at 2121.75. This could trigger a break into a long-term uptrending angle at 2115.25.

Watch the price action and read the order flow at 2135.75 today. Trader reaction to this angle will tell us if the buying is getting stronger, or if sellers are in control.