E-mini S&P 500 Index (ES) Futures Technical Analysis – Closing Price Reversal Top Signals Return of Sellers

March E-mini S&P 500 Index futures posted a record high early Friday, but late-session profit-taking drove the benchmark index lower for the day. Friday marked day three of the so-called Santa Claus rally period, which is historically beneficial for stocks. Despite the lower close, the S&P 500 Index notched its fifth straight week of gains.

On Friday, March E-mini S&P 500 Index futures settled at 3237.50, down 7.00 or -0.22%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was reaffirmed on Friday when buyers took out the previous session high at 3244.75.

The main trend will change to down on a trade through 3071.00. This is highly unlikely, however, the closing price reversal top suggests the selling may be greater than the buying at current price levels. It also suggests upside momentum may be slowing. A trade through 3235.50 on Monday will confirm the chart pattern.

The minor trend is also up. A trade through 3222.50 will change the minor trend to down. This will shift momentum to the downside.

The first minor range is 3222.50 to 3254.00. Its 50% level or pivot is 3238.25.

The second minor range is 3192.00 to 3254.00. Its 50% level comes in at 3223.00.

Daily Gann Angle Technical Analysis

On Friday, March E-mini S&P 500 Index futures crossed to the strong side of a minor uptrending Gann angle at 3248.00, but the move failed to attract enough buyers to sustain the rally. This suggests a slowdown in upside momentum.

The Gann angles indicate there is plenty of room to the downside if the closing price reversal top is confirmed, the minor 50% levels fail and the minor trend changes to down.

The first downside target is an uptrending Gann angle at 3214.25. This is followed closely by a second uptrending Gann angle at 3207.00.

Short-Term Outlook

The bulls are just trying to maintain the uptrend with higher-tops and higher bottoms. The aggressive counter-trend sellers are trying to break the pattern. They’ll be successful over the short-term if they can confirm the closing price reversal top and take out a series of potential support levels.

I don’t think the intention of the sellers is to change the trend. I think they are just longs looking to book profits and alleviate some of the upside pressure.