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E-mini S&P 500 Index (ES) Futures Technical Analysis – December 28, 2018 Forecast

Based on the early price action, the direction of the March E-mini S&P 500 Index the rest of the session is likely to be determined by trader reaction to the short-term 50% level at 2503.75.
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. The early move is follow-through confirmation of yesterday’s dramatic reversal to the upside.

At 1414 GMT, the index is trading 2504.00, up 9.00 or +0.37%.

Daily March E-mini S&P 500 Index

The main trend is down according to the daily swing chart. However, momentum is trending higher due to Wednesday’s closing price reversal bottom and subsequent confirmation on Thursday. A trade through 2690.50 will change the main trend to up. The downtrend will resume if 2316.75 is taken out.

On the downside, the support is a long-term 50% level at 2368.50.

The short-term range is 2690.50 to 2316.75. The market is currently testing its retracement zone at 2503.75 to 2547.75. This zone is very important to the short-term structure of the market.

Since the main trend is down, sellers are likely to come in on a test of 2503.75 to 2547.75. If successful, a new secondary lower top will form. Aggressive counter-trend buyers are going to try to drive the market through this zone.

The main range is 2819.00 to 2316.75. Its retracement zone is another potential target at 2568.00 to 2627.25. Once again, sellers are likely to show up on a test of this zone.

Forecast

Based on the early price action, the direction of the March E-mini S&P 500 Index the rest of the session is likely to be determined by trader reaction to the short-term 50% level at 2503.75.

Bullish Scenario

A sustained move over 2503.75 will indicate the presence of buyers. If this move generates enough upside momentum then look for the rally to possibly extend into the short-term Fib level at 2547.75 and the main 50% level at 2568.00. Look for sellers to come in on the initial test of this level.

Bearish Scenario

A sustained move under 2503.75 will signal the presence of sellers. If this move generates enough downside momentum then we could see a 50% retracement of the rally from 2316.75 to 2519.25. This level comes in at 2418.00.

Basically, we’re going to see a battle between trend traders and momentum traders at 2503.75. If trend traders win then look for a pullback to 2418.00. If momentum traders win then the rally is likely to extend into 2547.75 then 2568.00.

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