E-mini S&P 500 Index (ES) Futures Technical Analysis – December 11, 2018 Forecast

December E-mini S&P 500 Index futures are trading higher shortly before the cash market opening. Buyers are following through to the upside following yesterday’s dramatic closing price reversal bottom. The move is a counter-trend rally, but it may have enough upside momentum to trigger a 2 to 3 day surge.

At 1300 GMT, December E-mini S&P 500 Index futures are trading 2665.50, up 22.50 or +0.85%.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. However, momentum is trending higher. The main trend will change to up on a trade through 2814.00.

Yesterday, a closing price reversal bottom was formed at 2583.00. The chart pattern was confirmed earlier today when buyers took out 2648.50. This also shifted momentum to the upside. A trade through 2583.00 will negate the chart pattern and signal a resumption of the downtrend.

The new short-term range is 2814.00 to 2583.00. Its retracement zone at 2698.00 to 2725.25 is the primary upside target. A major retracement zone is 2701.75 to 2748.50.

Combining the two retracement zones creates a resistance cluster at 2698.00 to 2701.75. Since the main trend is down, sellers are likely to show up on a test of this zone.

Daily Swing Chart Technical Forecast

Based on the early price action, the direction of the December E-mini S&P 500 Index on Tuesday is likely to be determined by trader reaction to yesterday’s high at 2648.50.

Bullish Scenario

A sustained move over 2648.50 will indicate the presence of buyers. If this move creates enough upside momentum then we could see an acceleration into the resistance cluster at 2698.00 to 2701.75.

Bearish Scenario

Now that the index has taken out 2648.50, confirming the closing price reversal bottom, it’s important that buyers continue to come in to sustain the upside momentum. A failure to hold this level will mean the buying has been weak, and that the confirmation was likely fueled by short-covering and buy stops.

If sellers re-emerge then look for a 50% correction of the first leg up from 2583.00. At this time, this level is about 2626.25.

Basically, the counter-trend rally should remain intact as long as 2648.50 holds as support. If it does then look for an eventual rally into 2698.00 to 2701.75.