E-mini S&P 500 Index (ES) Futures Technical Analysis – August 12, 2015 Forecast

September E-mini S&P 500 Index futures plunged during the pre-market session after China devalued its currency for a second straight day. The trade through 2062.00 turned the main trend to down on the daily chart. A new main top was formed at 2101.75.

The downside momentum created by the pre-market sell-off is giving the index a downside bias into the cash market opening. Sellers are likely to go after a downtrending angle at 2058.25. Taking out this angle with conviction should lead to a quick break into the July 27 main bottom at 2056.50.

A sustained move under the main bottom at 2056.50 will reaffirm the downtrend. It is also a trigger point for an acceleration to the downside with the next targets a major 50% level at 2038.50 and another main bottom at 2034.25.

The daily chart opens up further under 2034.25 with the major Fibonacci level at 2018.00 the next major target.

Holding above 2056.50 and the angle at 2058.25 will signal the presence of buyers. Regaining the previous bottom at 2062.00 will indicate that the pre-market sell-off was triggered by short-covering rather than new short-sellers.

The first upside target is a very steep downtrending angle at 2069.75. Overtaking this angle will indicate the buying is getting stronger. This could trigger a rally into the next downtrending angle at 2085.75. The main upside target today is a resistance cluster at 2092.25 to 2093.75.

Based on the pre-market price action, the direction of the market during the regular session will be determined by trader reaction to the angle at 2058.25. Watch the price action and read the order flow. This will tell us whether the bulls or the bears are in control.