E-mini S&P 500 Index (ES) Futures Technical Analysis – Becomes Vulnerable to Downside Under 2549.00

December E-mini S&P 500 Index futures are trading flat shortly before the cash market open and inside yesterday’s range. This indicates investor indecision and impending volatility. It could also be indicating that momentum is getting ready to shift from up to down.

There is also a little divergence in the major indexes this morning with the Dow Jones Industrial Average inching higher and the S&P 500 and NASDAQ trading weaker ahead of the opening.

Daily Technical Analysis

The main trend is up according to the daily swing chart. However, the index is also in the window of time for a potentially bearish closing price reversal top.

A trade through 2556.50 will signal a resumption of the uptrend.

Taking out 2556.50 then breaking back under yesterday’s close at 2556.25 will be the first sign that the selling may be greater than the buying at current price levels. Closing below 2556.25 will form the reversal top.

The short-term range is 2485.00 to 2556.50. If there is an intraday sell-off, or if a closing price reversal top forms then its retracement zone at 2520.75 to 2512.25 will become the primary downside target.

Daily Forecast

Based on the early trade, the direction of the December E-mini S&P 500 Index is likely to be determined by trader reaction to the long-term uptrending angle at 2555.25.

A sustained move over 2555.25 will indicate the presence of buyers. This could generate enough upside momentum to challenge yesterday’s high at 2556.50. This is also a potential breakout point to the upside.

A sustained move under 2555.25 will signal the presence of sellers. This could lead to a quick break into 2549.00.

The daily chart starts to open up to the downside under 2549.00 with the next major target coming in at 2520.75. Sellers taking out 2549.00 could trigger an acceleration to the downside, or momentum could shift to the downside, allowing the index to gradually drift down to the first target at 2520.75.