E-mini S&P 500 Index (ES) Futures Technical Analysis – December 19, 2016 Forecast

March E-mini S&P 500 Index futures are trading flat shortly ahead of the cash market opening. The pre-market range was extremely tight, suggesting that the major players – institutions, banks and mutual funds – may have already moved into holiday mode. I think they are going to try to hold the market in a range over the next two weeks. If it does rally, it will likely be a volatility spike, triggered by traders taking advantage of the light volume.

During this time of year, any hedge fund or money managers who is up money for the year is not going to take any big chances to avoid messing up their nice year-end bonus.

Technical Analysis

The main trend is up according to the daily swing chart. A trade through 2273.00 will signal a resumption of the uptrend. A move through 2243.00 will make 2273.00 a new main top. This would signal a shift in momentum to the downside. A trade through 2174.25 will change the main trend to down.

The extremely short-term range is 2273.00 to 2243.00. Its 50% level or pivot is 2258.00. The market has been straddling this level for four days. It’s safe to say that it is controlling the short-term direction of the market.

The main range is 2174.25 to 2273.00. Its retracement zone at 2223.50 is the next downside target.

Forecast

Based on the current price at 2257.50, the direction of the market today is likely to be determined by trader reaction to the short-term pivot at 2258.00 and the short-term uptrending angle at 2254.25.

A sustained move over 2258.00 will indicate the presence of buyers. This could create enough upside momentum to challenge the 2273.00 main top.

A sustained move under 2254.25 will signal the presence of sellers. If it fails then look for an acceleration to the downside into 2243.00 then 2239.00.

The angle at 2239.00 is very important. If it fails as support then look for a possible volatile break into 2223.50 and 2214.25.

Look for a bullish tone today on a sustained move over 2258.00 and a bearish tone on a sustained move under 2254.25.

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