E-mini S&P 500 Index (ES) Futures Technical Analysis – Could Be Headed into 3446.50 to 3394.25

December E-mini S&P 500 Index futures are trading nearly flat late Tuesday as the euphoria over signs of a first successful late-stage COVID-19 vaccine trial faded, while investors continued to pull money out of the big tech companies that have benefited most from the pandemic.

At 19:17 GMT, December E-mini S&P 500 Index futures are trading 3534.25, down 9.75 or -0.28%.

The benchmark index hit new peaks on Monday as data from Pfizer’s late-stage COVID-19 vaccine trial spurred bets of a swift economic recovery next year. Democrat Joe Biden’s projected victory in the U.S. presidential election also added to the market cheer.

Biden hailed the progress on the vaccine, but urged caution saying it would be “many more months” before widespread vaccination is available. Meanwhile, daily new U.S. cases topped 100,000 for the sixth straight day.

Shares of big banks, which are sensitive to the broader economic outlook, edged higher while cruise line operators and airlines battered by travel restrictions gained between 1% and 4.3%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 3668.00 will signal a resumption of the uptrend. The main trend will change to down on a move through 3225.00.

The minor trend is also up. The new minor top is 3668.00.

The short-term range is 3225.00 to 3668.00. Its retracement zone at 3446.50 to 3394.25 is the primary downside target. With the trend up, buyers are likely to re-emerge on a test of this zone.

The new minor range is 3668.00 to 3506.50. Its 50% level at 3587.25 is a potential upside target.

Short-Term Outlook

Monday’s late sell-off suggests that investors are a little nervous about buying strength at current price levels. If that’s the case then look for a pullback into a value area. They should be waiting down there.

A failed rally back to 3587.25 will be a strong indication that investors would prefer to buy dips.

If the selling continues then look for a move into the short-term retracement zone at 3446.50 to 3394.25. Since the trend is up, a move into this area is likely to attract buyers. If the bottom of this zone fails then look for an even steeper decline.