E-mini S&P 500 Index (ES) Futures Technical Analysis – Daily Trend Changes to Down Ahead of Weekend

March E-mini S&P 500 Index futures finished mostly lower on Friday, weighed down by Big Tech as investors digested the Federal Reserve’s decision to end its pandemic-era stimulus faster.

The benchmark index ended with a decline for the week after the Fed on Wednesday signaled a faster tapering of monetary stimulus and three quarter-percentage point interest rate hikes by the end of 2022 to combat surging inflation.

On Friday, March E-mini S&P 500 Index futures settled at 4610.00, down 49.25 or -1.07%. The S&P 500 Trust ETF (SPY) closed at $459.89, down $4.93 or -1.06%.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The trend turned down on Friday when buyers took out the last swing bottom at 4596.25. A trade through 4743.25 will change the main trend to up.

The short-term range is 4485.75 to 4743.25. The index settled inside its retracement zone at 4614.50 – 4584.00. Trader reaction to this area is likely to determine the near-term direction of the index.

The main range is 4252.75 to 4743.25. Its retracement zone at 4498.00 to 4440.00 is the primary downside target. It is controlling the longer-term direction of the index.

Short-Term Outlook

The direction of the March E-mini S&P 500 Index on Monday is likely to be determined by trader reaction to 4614.50 to 4584.00.

Bullish Scenario

Look for an upside bias to develop on a sustained move over 4614.50. If the move creates enough upside momentum then look for the counter-trend buying to possibly extend into the minor pivot at 4666.75.

Bearish Scenario

A sustained move under 4584.00 will indicate the selling pressure is getting stronger. This could trigger an acceleration to the downside with the first target the main 50% level at 4498.00, followed by the main bottom at 4485.75.

Taking out 4485.75 will reaffirm the downtrend. This could trigger a further break into the main Fibonacci level at 4440.00.

Side Notes

Aggressive buyers could come in on a test of 4614.50 – 4584.00. They may try to form a potentially bullish secondary higher bottom.

If 4584.00 fails to hold as support, the selling pressure could increase with 4498.00 to 4440.00 the next major target. This zone provided support at 4485.75 on December 3. Aggressive value-seekers could come in on a test of this area a second time.

However, there are risks to the downside if 4440.00 fails as support. The daily chart indicates there is plenty of room to the downside with 4252.75 the next major target.