E-mini S&P 500 Index (ES) Futures Technical Analysis – Big Decision for Traders at 3352.75 – 3337.00

The benchmark S&P 500 Index finished a choppy session slightly lower on Wednesday as losses in technology shares weighed down the index even after the U.S. Federal Reserve issued a statement that cemented expectations interest rates would stay near zero for a prolonged period.

On Wednesday, December E-mini S&P 500 Index futures settled at 3379.50, down 15.50 or -0.46%.

The index initially extended gains in afternoon trading after the Fed in its policy statement kept rates near zero and promised to keep them near there until inflation is on track to “moderately exceed” the U.S. central bank’s 2% inflation target “for some time.”

But the market lost ground heading into the close, led by losses in technology shares.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 3286.00 will signal a resumption of the uptrend after a five day rally. A move through 3576.25 will change the main trend to up.

The minor trend is also down, but momentum did shift to the upside briefly after buyers took out 3413.75, confirming last week’s closing price reversal bottom.

The short-term range is 3576.25 to 3286.00. Its 50% to 61.8% retracement zone at 3431.25 to 3465.50 is the primary upside target.

The new minor range is 3286.00 to 3419.50. Its retracement zone at 3352.75 to 3337.00 is the next downside target area.

Daily Swing Chart Technical Forecast

We were looking for a rally into 3431.25 to 3465.50. We were also looking for sellers to re-emerge on a test of this area because the main trend is down. Unfortunately, the rally stalled at 3419.50 before posting a minor closing price reversal top. We are calling it minor because the best closing price reversal tops usually occur after a 7 to 10 day rally.

A trade through 3373.75 will confirm the minor reversal top. This could lead to a test of the minor retracement zone at 3352.75 to 3337.00.

This zone is important because aggressive counter-trend buyers are likely to come in on a test of this zone. They are going to try to form a potentially bullish secondary higher bottom. Sellers are going to try to drive the index into 3286.00 as they try to establish a new main top at 3419.50.

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