E-mini S&P 500 Index (ES) Futures Technical Analysis – December 26, 2018 Forecast

March E-mini S&P 500 Index futures are called higher based on the pre-market trade. The index was under pressure earlier in the session, but a combination of short-covering and aggressive counter-trend buying helped turn the market higher shortly before the cash market opening. The turnaround has also put the index in a position to post a potentially bullish closing price reversal bottom.

At 1543 GMT, March E-mini S&P 500 Index futures are trading 2354.00, up 12.25 or +0.54%.

Daily Technical Analysis

The main trend is down according to the daily swing chart, however, the session begins with the market inside the window of time for a closing price reversal bottom. This chart pattern will not change the main trend to up, but it could trigger the start of a 2 to 3 day counter-trend rally.

The index is currently trading inside a major long-term retracement zone at 2368.50 to 2231.00. This zone is controlling the longer-term direction of the index.

Additional support levels come in at 2275.75, 2262.00 and 2241.50.

Daily Technical Forecast

Based on the early price action, the direction of the March E-mini S&P 500 Index on Wednesday is likely to be determined by trader reaction to the major 50% level at 2368.50.

Bullish Scenario

A sustained move over 2368.50 will indicate the buying is getting stronger. This could trigger an acceleration into the steep downtrending Gann angle at 2402.25.

Since the main trend is down, look for sellers to come in on the first test of 2402.25. Overtaking this Gann angle could trigger an acceleration to the upside with the next downtrending target angle coming in at 2546.25.

Bearish Scenario

A sustained move under 2368.50 will signal the presence of sellers. If this generates enough downside momentum then look for a possible retest of today’s low at 2316.75. If this fails then the downtrend will resume with 2275.75 the next downside target, followed by a series of levels at 2262.00, 2241.50 and the major Fibonacci level at 2231.00.