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James Hyerczyk
E-mini S&P 500 Index

September E-mini S&P 500 Index futures are trading higher shortly after the cash market opening after posting a dramatic reversal to the upside during the premarket session. Chinese authorities offered some relief for investors when they decided to support the Yuan after yesterday steep break. The move helped drive down demand for safe-haven assets, while fueling a short-covering rally in higher risk assets.

At 13:41 GMT, September E-mini S&P 500 Index futures are trading 2870.75, up 40.75 or +1.49%.

Daily September E-mini S&P 500 Index

Daily Technical Analysis

It feels like we’re chasing the market this morning after the pre-market rally put the index in a position to form a potentially bullish closing price reversal bottom. This is the move we were looking for on Monday. Nonetheless, the index has returned to the key resistance zone that it spent most of the trading session inside yesterday. Trader reaction to this zone is likely to determine the direction of the index the rest of the session.

The main range is 2732.25 to 3029.50. Its retracement zone at 2881.00 to 2845.75 is controlling the direction of the index once again.

The new minor range is 3029.50 to 2775.75. If the rally continues then its retracement zone at 2902.75 to 2932.50 will become the next upside target.


Daily Technical Forecast

Given the current price at 2970.75, the direction of the index the rest of the session is likely to be determined by trader reaction to the 50% level at 2881.00 and the Fibonacci level at 2845.75. Look for a choppy, two-sided trade if the market remains inside this zone.

Bullish Scenario

Holding 2845.75 will indicate the presence of counter-trend buyers. If this creates enough upside momentum then look for a drive into 2881.00. Overtaking this level will indicate the buying is getting stronger. This could trigger a further rally into a short-term 50% level at 2902.75, followed by an uptrending Gann angle at 2912.25, a downtrending Gann angle at 2917.50 and a short-term Fibonacci level at 2932.50. The latter is the trigger point for an acceleration to the upside.

Bearish Scenario

The inability to overcome 2881.00 will signal the presence of sellers. This could drive the index into the Fibonacci level at 2845.00. We could see an acceleration to the downside if this price fails with the next target angle coming in at 2822.25. This is followed by another uptrending Gann angle at 2777.25. This is the last potential support angle before the 2732.25 main bottom.

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