E-mini S&P 500 Index (ES) Futures Technical Analysis – Testing Upper End of Zone; Set-up for Breakout

December E-mini S&P 500 Index futures are expected to open higher on Thursday as bets of a piecemeal fiscal stimulus deal lifted sentiment, while data on weekly jobless claims showed the labor market recovery continued to sputter.

Two days after calling off negotiations on a comprehensive fiscal aid bill, U.S. President Donald Trump said some discussions were ongoing with Democrats about boosting support for U.S. airlines and providing Americans with $1,200 stimulus checks.

At 13:17 GMT, December E-mini S&P 500 Index futures are trading 3430.00, up 23.25 or +0.68%.

In other news, data showed the number of Americans filing new claims for jobless benefits drifted lower last week but signaled the labor market was making little headway in getting millions of people back on the job after being out of work due to COVID-19 disruptions.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 3421.75 signaled a resumption of the uptrend after a one-day setback. The main trend will change to down on a move through 3198.00.

The minor trend is also up. A trade through 3330.50 will change the minor trend to down. This will also shift momentum to the downside.

The short-term range is 3576.25 to 3198.00. Its retracement zone at 3387.00 to 3431.75 is currently being tested. This zone is controlling the near-term direction of the index.

The longer-term range is 3246.25 to 3168.50. This zone stopped the selling at 3198.00 on September 24.

Daily Swing Chart Technical Forecast

Based on the early price action, the direction of the December E-mini S&P 500 on Thursday is likely to be determined by trader reaction to the Fibonacci level at 3431.75.

Bullish Scenario

A sustained move over 3431.75 will indicate the presence of buyers. This is a potential trigger point for an acceleration to the upside with the next major upside target coming in at 3576.25.

Bearish Scenario

A sustained move under 3431.75 will signal the presence of sellers. The first downside target is the 50% level at 3387.00. Watch for a technical bounce on the first test of this level. Look for an acceleration into 3330.50 if this price fails as support.