E-mini S&P 500 Index (ES) Futures Technical Analysis – Closed on Strong Side of Main Retracement Zone at 2881.00 to 2845.75

Based on Friday’s price action and the momentum into the close, the direction of the September E-mini S&P 500 Index on Monday is likely to be determined by trader reaction to the main 50% level at 2881.00.
James Hyerczyk
E-mini S&P 500 Index

September E-mini S&P 500 Index futures rose on Friday, recovering some losses from the wicked sell-off earlier in the week on hopes of more stimulus from central banks to reverse slowing growth.

A slight rebound in U.S. Treasury yields helped underpin the index by providing support for bank stocks. Equities received an additional boost after a report that Germany’s government would be prepared to ditch its balanced budget rule and take on new debt to counter a possible recession.

On Friday, September E-mini S&P 500 Index futures settled at 2891.50, up 43.00 or +1.49%.

All of the major S&P 500 sectors were higher, with technology stocks providing the biggest boost.

Daily September E-mini S&P 500 Index

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. Momentum is trending higher, however, due to the formation of a pair of closing price reversal bottoms at 2775.75 and 2817.75. The second could develop into a secondary higher bottom, which would be a sign that buyers are returning.

The main trend will change to up on a trade through 2944.25. A move through 2817.75 will shift momentum to the downside and a trade through 2775.75 will signal a resumption of the downtrend.

The main range is 2732.25 to 3029.50. Its retracement zone at 2881.00 to 2845.75 is controlling the near-term direction of the index.

The short-term range is 2775.75 to 2944.25. Its retracement zone at 2860.00 to 2840.00 is support. It is actually straddling the main Fibonacci level at 2845.75.

The intermediate range is 3029.50 to 2775.75. Its retracement zone at 2902.75 to 2932.50 is the next upside target. This zone provided resistance 5 out 7 sessions. Overtaking this zone could lead to a change in trend.

Daily Swing Chart Technical Forecast

Based on Friday’s price action and the momentum into the close, the direction of the September E-mini S&P 500 Index on Monday is likely to be determined by trader reaction to the main 50% level at 2881.00.

Bullish Scenario

A sustained move over 2881.00 will indicate the presence of buyers. This should lead to a test of the main 50% level at 2902.75. Overtaking this level is likely to trigger an acceleration to the upside with the next target the main Fibonacci level at 2932.50, followed closely by the main top at 2944.25.

The daily chart is wide open to the upside over 2944.25 with 3029.50 the next major upside target.

Bearish Scenario

A sustained move under 2881.00 will signal the presence of sellers. This could lead to a labored break with potential downside targets lined up at 2860.00, 2845.75 and 2840.00.

If the support levels fail to hold then look for the selling to extend into the minor bottom at 2817.75. If this bottom fails then sellers could challenge the main bottom at 2775.75.

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