E-mini S&P 500 Index (ES) Futures Technical Analysis – Bullish News On Trade Talks Could Trigger Huge Rally Through 2824.25

December E-mini S&P 500 Index futures closed higher on Friday, reversing earlier weakness after a Chinese official expressed optimism over the outcome of the crucial meeting between U.S. President Donald Trump and China’s President Xi Jinping. Reuters reported that a Chinese official said “consensus is steadily increasing” in US-China trade talks. However, the official added, according to the report, that differences between the two countries remained.

What we saw on Friday was a little taste of what we can expect from the stock market on Monday if a favorable trade deal is struck. It all depends on what is agreed upon. A full lifting of tariffs? A partial lifting? A suspension of tariffs?

On Friday, December E-mini S&P 500 Index futures settled at 2758.25, up 14.00 or +0.51%.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. However, momentum is trending higher. A trade through 2818.00 will change the main trend to up. A move through the next swing top at 2824.25 could trigger an acceleration to the upside.

A trade through 2626.00 will signal a resumption of the downtrend with targets coming in at 2603.00 and 2602.75.

The minor trend is up. It turned up on Thursday when buyers took out 2748.85. This shifted momentum to the upside.

The major retracement zone is 2748.50 to 2701.75. Trading on the strong side of this zone is helping to generate an upside bias. This zone is support.

The main range is 2947.00 to 2603.00. Its retracement zone at 2775.00 to 2815.50 is the next upside target. Since the trend is down, we could see sellers on the first test of this zone. Overtaking it, however, will be a sign of strength.

Daily Swing Chart Technical Forecast

Based on Friday’s price action and the close at 2758.75, the direction of the December E-mini S&P 500 Index on Monday will be determined by trader reaction to the major 50% level at 2748.50.

Bullish Scenario

A sustained move over 2748.50 will indicate the presence of buyers. This could fuel a quick rally into the main 50% level at 2775.00. Look for sellers on the first test. Overcoming this level, however, could trigger a surge into the main Fibonacci level at 2815.50, followed by main tops at 2818.00 and 2824.25.

The daily chart indicates there is plenty of room to the upside if 2824.25 is taken out with conviction. This could trigger an acceleration to the upside with the next major target coming in at 2947.00.

Bearish Scenario

A sustained move under 2748.50 will signal the presence of sellers. This could trigger an acceleration into the major Fibonacci level at 2701.75. This is another trigger point for an acceleration to the downside with targets coming in at 2626.00, followed by 2603.00 and 2602.75.