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James Hyerczyk
E-mini S&P 500 Index
E-mini S&P 500 Index

March E-mini S&P 500 Index futures are called higher shortly before the cash market opening, bouncing back from a steep sell-off on Monday. Traders said that sell-off was related to concerns over a weakening global economy and the Federal Reserve’s anticipated rate hike on Wednesday. The Fed is widely expected to hike its benchmark for a fourth and final time of 2018.

At 1240 GMT, March E-mini S&P 500 Index futures are trading 2570.00, up 14.25 or +0.55%.

Daily March E-mini S&P 500 Index

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The downtrend was reaffirmed on Monday when sellers took out the last main bottom at 2586.75. The selling was also strong enough to take out the February 9 bottom at 2540.75.

The short-term range is 2690.50 to 2533.50. If counter-trend buyers can generate enough upside momentum then we could see a test of its retracement zone at 2612.00 to 2630.50.

The main range is 2819.00 to 2533.50. Its retracement zone is 2676.25 to 2710.00. Inside this retracement zone is the last main top at 2690.50.


Daily Swing Chart Technical Forecast

Today is the tenth day down from the 2819.00 main top. This puts the index in the window of time for a closing price reversal bottom.

Based on this potential chart pattern, the direction of the March E-mini S&P 500 Index is likely to be determined by trader reaction to yesterday’s low at 2533.50.

Bullish Scenario

A sustained move over 2533.50 will indicate the presence of counter-trend buyers. If this move can generate enough upside momentum then look for buyers to make a run at the retracement zone at 2612.00 to 2630.50. Since the main trend is down, sellers are likely to come in on a test of this zone.

Bearish Scenario

Taking out 2533.50 and sustaining the move will signal the presence of sellers. If the downside pressure continues to build then we could see an eventual break into the August 25, 2017 main bottom at 2434.50.

Closing Price Reversal Pattern

A third pattern that could develop is the potentially bullish closing price reversal bottom. Taking out 2533.50 then turning higher for the session will put the market in a position to form this chart pattern. The trend won’t change to up on the move, but we could see a 2 to 3 day counter-trend rally.

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