E-mini S&P 500 Index (ES) Futures Technical Analysis – February 4, 2019 Forecast

March E-mini S&P 500 Index futures are trading slightly lower shortly before the cash market opening. The index is trading inside Friday’s range which suggests investor indecision and impending volatility. Volume is also light because of the start of the Lunar New Year in Asia.

Despite stronger than expected economic data, the index formed a closing price reversal top on Friday. This could be signaling a shift in momentum. Sentiment may be getting ready to shift to the downside because the strong economy data is helping to drive up Treasury yields. Treasurys compete with stocks for investment capital.

At 14:30 GMT, March E-mini S&P 500 Index futures are trading 2703.75, down 0.50 or -0.02%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 2716.00 will negate a closing price reversal top and signal a resumption of the uptrend. A trade through 2695.50 will confirm the closing price reversal top. This could trigger the start of a 2 to 3 day correction. A move through 2612.50 will change the main trend to down.

The minor trend is also up. A trade through 2622.25 will change the minor trend to down. This will also shift momentum to the downside.

The major retracement zone is 2711.50 to 2636.00. This zone is controlling the near-term direction of the index. Traders should treat this zone like support.

The minor range is 2612.50 to 2716.00. Its 50% level at 2664.25 is the next downside target. Since the main trend is up, look for buyers to come in on the first test of this level.

Daily Swing Chart Technical Forecast

Based on the early price action and the current price at 2703.75, the direction of the March E-mini S&P 500 Index on Monday is likely to be determined by trader reaction to the main Fibonacci level at 2711.50.

Bullish Scenario

A sustained move over 2711.50 will indicate the presence of buyers. Taking out 2716.00 will indicate the buying is getting stronger. The daily chart indicates there is plenty of room to the upside with 2819.00 the next major upside target. So don’t be surprised by an acceleration to the upside over the short-term.

Bearish Scenario

A sustained move under 2711.50 will signal the presence of sellers. This could trigger a sharp break into a minor 50% level at 2664.25. Buyers could come in on the first test of this level. If it fails then look for the selling to possibly extend into a cluster of potential support levels at 2636.00, 2622.25 and 2612.25.

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