E-mini S&P 500 Index (ES) Futures Technical Analysis – September 30, 2016 Forecast

December E-mini S&P 500 Index futures are trading lower at 0951 GMT. The market has been under pressure from the opening, but we have seen a strong technical bounce following a test of a key 50% level that alleviated some of the downside pressure.

The market is being news driven by concerns over the financial health of Deutsche Bank and worries that the Saudis may be planning to pull large sums of money out of U.S. banks due to the passing of legislation that allows U.S. citizens to sue Saudi Arabia over 9/11. The U.S. equity markets are also being dragged lower by a drop in European shares on concerns over the systemic risk posed by German banks.

TECHNICAL ANALYSIS

The main trend is down according to the daily swing chart. Momentum is also down with the formation of the new secondary lower top at 2167.00. A trade through 2132.75 will reestablish the downtrend after several days of counter-trend trading. A trade through 2167.00 will turn the main trend to up.

The main range is 2100.25 to 2172.75. Its retracement zone is 2136.50 to 2128.00. This zone is currently helping to prop up the market while standing in the way of the start of a steep sell-off.

We expect a wide range today with 2151.00 the upper level and 2136.50 the lower level. Traders will feed off the market’s reaction to these two prices.

FORECAST

BASED ON THE CURRENT PRICE AND THE EARLY PRICE ACTION, THE DIRECTION OF THE E-MINI S&P 500 INDEX TODAY IS GOING TO BE DETERMINED BY TRADER REACTION TO THE MAIN 50% LEVEL AT 2136.50.

A SUSTAINED MOVE OVER 2136.50 WILL INDICATE THAT BUYERS ARE COMING IN TO SUPPORT THE MARKET. THIS COULD LEAD TO A TEST OF A RESISTANCE CLUSTER AT 2150.75 TO 2151.00.

A BREAKOUT OVER 2151.00 WILL SIGNAL THE BUYING IS GETTING STRONGER WITH THE NEXT TARGET ANGLES COMING IN AT 2159.00 AND 2163.00. THIS IS THE LAST POTENTIAL RESISTANCE ANGLE BEFORE THE 2167.00 MAIN TOP.

A SUSTAINED MOVE UNDER 2136.50 WILL SIGNAL THE PRESENCE OF SELLERS. THIS COULD GENERATE ENOUGH DOWNSIDE MOMENTUM TO TAKE OUT THE MAIN BOTTOM AT 2132.75. THE NEXT TARGET IS A RESISTANCE CLUSTER AT 2128.25 TO 2128.00.

THE DAILY CHART OPENS UP UNDER 2128.00. TAKING OUT THIS PRICE COULD TRIGGER A STEEP DROP INTO THE NEXT UPTRENDING SUPPORT ANGLE AT 2114.25.