E-mini S&P 500 Index (ES) Futures Technical Analysis – February 20, 2017 Forecast

March E-mini S&P 500 Index futures are trading higher early in the session on Monday. The index remains inside its February 15 range for a third day, indicating investor indecision and impending volatility.

Technical Analysis

The main trend is up according to the daily swing chart. A trade through 2351.50 will signal a resumption of the uptrend.

A trade through 2331.25 will make 2451.50 a new minor top.

Today is a U.S. bank holiday so volume is expected to be light. We could see an occasional volatility spike, but because of the low volume, we have to be careful about buying strength or selling weakness. The market also continues to remain inside the window of time for a potentially bearish closing price reversal top.

The main range is 2262.25 to 2351.50. Its retracement zone is 2306.75 to 2296.25. If there is a correction then the retracement zone will become the primary downside target.

Forecast

Based on Friday’s close at 2348.00, the direction of the index today is likely to be determined by trader reaction to last week’s high at 2351.50.

A sustained move over 2351.50 will indicate the presence of buyers. If volume is behind the move then look for the rally to extend into the next uptrending angle at 2367.50. Crossing to the strong side of this angle will put the market in an extremely bullish position.

Overtaking 2351.50 then breaking under it, or the inability to take out this level will signal the presence of sellers. If volume is behind this move and momentum shifts to the downside then look for a possible break into the next uptrending angle at 2333.50. This is also a trigger point for an acceleration into the next pair of uptrending angles at 2318.25 and 2316.50.

Watch the price action and read the order flow at 2351.50 today. Also pay attention to the volume, be careful buying strength or selling weakness if the volume is below average today.