E-mini S&P 500 Index (ES) Futures Technical Analysis – Close Below 3075.75 Forms Potentially Bearish Closing Price Reversal Top

December E-mini S&P 500 Index futures are edging lower at the mid-session after hitting a record high earlier in the session. Position trimming and profit-taking are likely behind the weakness, which began despite the release of better-than-expected U.S. services data. Traders may also be worried about valuations at current prices levels as well as the slow progress in trade talks.

At 17:01 GMT, December E-mini S&P 500 Index futures are trading 3073.25, down 2.50 or -0.08%.

Daily Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was confirmed earlier in the session when buyers took out Monday’s high. A trade through 3020.25 will change the main trend to down.

I don’t expect a change in trend, but due to the prolonged move up in terms of price and time, the market is in the window of time for a closing price reversal top. This chart pattern won’t change the trend but it could be an indication that the selling is greater than the buying at current price levels. If formed today then confirmed, this chart pattern could trigger the start of a 2 to 3 day correction.

The short-term range is 3020.25 to 3085.75. Its 50% level or pivot at 3053.00 is the first downside target.

Daily Technical Forecast

Based on the early price action and the current price at 3073.75, the direction of the December E-mini S&P 500 Index the rest of the session on Tuesday is likely to be determined by trader reaction to Monday’s close at 3075.75.

Bullish Scenario

A sustained move over 3075.75 will indicate the presence of buyers. If this creates enough upside momentum then look for a retest of the intraday high at 3085.75. This is a potential trigger point for an acceleration to the upside.

Bearish Scenario

A sustained move under 3075.75 will signal the presence of sellers. This will also put the index in a position to form a closing price reversal top. The first downside target is the steep uptrending Gann angle at 3068.25. Watch for a technical bounce on the first test of this angle.

If the angle at 3068.25 fails as support then look for a potential acceleration to the downside with the next target the short-term pivot at 3053.00. Since the main trend is up, buyers could come in on the first test of this level.

If 3053.00 fails then look for the selling to possibly extend into a pair of uptrending Gann angles at 3044.25 and 3025.75.