E-mini S&P 500 Index (ES) Futures Technical Analysis – Close Under 3198.50 Forms Closing Price Reversal Top

December E-mini S&P 500 Index futures are inching lower at the mid-session on Tuesday after hitting a record high earlier in the day. The S&P 500 Index along with the Dow and NASDAQ all posted record closing highs on Monday, however, the Dow is lagging the broad-based indexes today.

Traders are saying that value issues may be encouraging investors to book profits as well as lingering doubts over the details of the U.S.-China trade agreement and renewed worries over an orderly Brexit.

At 16:26 GMT, December E-mini S&P 500 Index futures are trading 3197.00, down 1.50 or -0.02%.

Daily Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was reaffirmed earlier today when buyers took out the previous top at 3202.50.

The main trend will change to down on a trade through 3071.00. This is highly unlikely. However, the prolonged move up in terms of price and time has put the index in a position to form a potentially bearish closing price reversal top.

The minor trend is also up. A move through 3118.25 will change the minor trend to down. This will also shift momentum to the downside.

Daily Technical Forecast

Based on the early price action, 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 3198.50.

Bullish Scenario

A sustained move over 3198.50 will indicate the presence of buyers. If this move is able to generate enough upside momentum then look for the rally to possibly extend beyond today’s intraday high at 3203.50.

Bearish Scenario

A sustained move under 3198.50 will signal the presence of sellers. Crossing to the weak side of the steep uptrending Gann angle at 3198.25 will indicate the selling may be getting stronger. If this is able to generate enough downside momentum then don’t be surprised by an acceleration to the downside.

The nearest potential support angle is 3158.25, followed by another uptrending Gann angle at 3151.00.

Side Notes

A close under 3198.50 will form a closing price reversal top. If confirmed on Wednesday, this won’t change the main trend to down, but it could trigger the start of a 2 to 3 day correction.