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James Hyerczyk
E-mini S&P 500 Index

Escalating concerns over U.S.-China relations and increasing worries over a global recession are helping to drive September E-mini S&P 500 Index futures sharply lower shortly before the cash market opening on Wednesday. The drop in equity prices and rapid rise in global bonds indicates that fear may be gripping the markets.

At 12:57 GMT, September E-mini S&P 500 Index futures are trading 2846.25, down 29.75 or -1.04%.

Daily September E-mini S&P 500 Index

Daily Technical Analysis

The main trend is down according to the daily swing chart. On Monday, the index formed a potentially bullish closing price reversal bottom, but the follow-through rally earlier today stalled at 2889.25, falling short of its retracement zone objective.

A trade through 2775.75 will negate the closing price reversal bottom and signal a resumption of the downtrend. This could lead to a test of the next main bottom at 2732.25. This is a potential trigger point for an acceleration to the downside.

The main range is 2732.25 to 3029.50. Its retracement zone at 2881.00 to 2845.75 is controlling the near-term direction of the index.

The short-term range is 2029.50 to 2775.75. Its retracement zone at 2902.75 to 2932.50 is the primary upside target and potential resistance zone.

The minor range is 2775.75 to 2889.25. Its retracement zone at 2832.50 to 2819.00 is today’s downside target. Aggressive counter-trend buyers could come in on a test of this zone. They will be trying to form a secondary higher bottom.

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Daily Technical Forecast

Based on the early price action and the current price at 2846.25, the direction of the September E-mini S&P 500 Index the rest of the session is likely to be determined by trader reaction to the Fibonacci level at 2845.75.

Bearish Scenario

A sustained move under 2845.75 will indicate the presence of sellers. The first target is the minor 50% level at 2832.50. This is followed by an uptrending Gann angle at 2824.25 and the minor 61.8% level at 2819.00.

If 2819.00 fails as support then look for a potential acceleration into the next support angle at 2778.25. This is the last potential support angle before the 2732.25 main bottom.

Bullish Scenario

A sustained move over 2845.75 will signal the presence of buyers. This could trigger a retest of the 50% level at 2881.00, followed by a resistance cluster at 2901.50 to 2902.75.

Overview

Watch for a technical bounce on the first test of 2832.50 to 2819.00. However, look out to the downside if 2819.00 fails.

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