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E-mini S&P 500 Index (ES) Futures Technical Analysis – August 26, 2019 Forecast

Based on the early price action and the current price at 2871.75, the direction of the September E-mini S&P 500 Index on Monday is likely to be determined by trader reaction to the main 50% level at 2881.00.
James Hyerczyk
E-mini S&P 500 Index

September E-mini S&P 500 Index futures are called higher based on the pre-market trade. After trading lower shortly after the early opening, the market reversed to the upside after President Trump said that China is ready to resume trade negotiations. This caught traders off-guard, triggering a massive intraday short-covering rally.

At 12:40 GMT, September E-mini S&P 500 Index futures are trading 2871.75, up 16.25 or +0.57%.

After the initial rally, the market stalled and has been rangebound for hours. This is probably because China has not confirmed Trump’s comments. The Chinese haven’t denied them either, which is a good sign. However, if they deny the comments then prices could fall back to today’s intraday lows.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. It was reaffirmed earlier in the session when sellers took out the previous swing bottom at 2817.75. A trade through 2939.75 will change the main trend to up.

The main range is 2732.25 to 3029.50. Its retracement zone at 2881.00 to 2845.75 continues to exert a major influence on the direction of the index.

The short-term range is 3029.50 to 2775.75. Its retracement zone at 2902.75 to 2932.50 is resistance. However, overtaking this zone could trigger an acceleration to the upside.

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Daily Swing Chart Technical Forecast

Based on the early price action and the current price at 2871.75, the direction of the September E-mini S&P 500 Index on Monday is likely to be determined by trader reaction to the main 50% level at 2881.00.

Bullish Scenario

A sustained move over 2881.00 will indicate the presence of buyers. If this move can create enough upside momentum then look for the rally to extend into the short-term 50% level at 2902.75. Look for sellers on the first test of this level.

Overtaking 2902.75 will indicate the buying is getting stronger with the main Fib level at 2932.50 the next likely upside target. This is followed by a pair of main tops at 2939.75 and 2944.25. The latter is the trigger point for an acceleration to the upside.

Bearish Scenario

A sustained move under 2881.00 will signal the presence of sellers. The first downside target is the main Fibonacci level at 2845.75. If this fails then look for the selling to possibly extend into the intraday low at 2810.25 and the main bottom at 2775.75.

Overview

This intraday turnaround could stall and prices could retreat if China doesn’t validate Trump’s claim of a resumption of trade talks, or if the economic powerhouse denies the phone call.

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