E-mini S&P 500 Index (ES) Futures Technical Analysis – Enough Momentum to Challenge 3246.25 – 3168.50

December E-mini S&P 500 Index futures are trading sharply lower late Wednesday as a surge in coronavirus cases in the United States and Europe crushed hopes for a quick global economic recovery. New cases and hospitalizations set records in the U.S. Midwest, while concerns over a national lockdown in France and tighter restrictions in German sapped investor appetite for risk.

At 19:39 GMT, December E-mini S&P 500 Index futures are at 3283.00, down 100.00 or -2.96%.

Shares of hotels, airlines and other companies sensitive to COVID-19 related curbs led the index lower with Wynn Resorts down 2% and the S&P 1500 airlines index declining 3%. The energy index lost about 3% as oil prices fell on fears of lower fuel demand.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, but momentum is trending lower. The main trend will change to down on a trade through the nearest main bottom at 3198.00. A move through 3541.00 will signal a resumption of the uptrend.

The minor trend is down. This is helping to generate the downside momentum. A trade through 3462.50 will change the minor trend to up. This will shift momentum to the upside.

The main range is 2916.50 to 3576.25. Its retracement zone at 3246.25 to 3168.50 is the primary downside target. Inside this zone are three main bottoms at 3198.00, 3184.75 and 3181.75.

The short-term range is 3198.00 to 3541.00. Its 50% level at 3369.50 is new resistance. The market collapsed on Wednesday when this level was violated.

Short-Term Outlook

Our first objective is the 50% level at 3246.25. We could see a technical bounce on the first test of this level. If it fails then look for the selling to possibly extend into the main bottoms from 3198.00 to 3181.75, followed closely by the Fibonacci level at 3168.50.

The near-term trend is going to be determined by trader reaction to 3246.25 to 3168.50. The latter is a potential trigger point for an acceleration to the downside.

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