E-mini S&P 500 Index (ES) Futures Technical Analysis – February 5, 2019 Forecast

Based on the early price action, the direction of the March E-mini S&P 500 Index is likely to be determined by trader reaction to the main Fibonacci level at 2711.50. Taking out this level will also put the index in a position to post a potentially bearish closing price reversal top. This could lead to the start of a 2 to 3 day correction. 
James Hyerczyk
E-mini S&P 500 Index

March E-mini S&P 500 Index futures are edging higher shortly after the cash market opening. Most of the early gains, however, took place during the pre-market session. So far volatility and volume have been below average. This is primarily due to the Lunar New Year holiday which has closed trading in Asia, uncertainty over U.S.-China trade relations and trader indifference ahead of President Trump’s State of the Union Address.

At 18:20 GMT, March E-mini S&P 500 Index futures are trading 2725.00, up 3.75 or +0.16%.

Daily March E-mini S&P 500 Index

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The chart shows there is plenty of room to the upside with the next major target the December 3 main top at 2819.00. A trade through 2612.50 will change the main trend to down.

The main retracement zone is 2711.50 to 2636.00. This zone is controlling the near-term direction of the market. Holding above this zone will help feed the upside momentum. Traders should treat this zone like support.

The minor range is 2612.50 to 2733.50. Its 50% level is 2673.00. This level falls inside the main retracement zone. Consider it support.

Daily Swing Chart Technical Forecast

Based on the early price action, the direction of the March E-mini S&P 500 Index 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. The next upside target is the main top at 2819.00. We could be looking at a slow grind into this level, or an acceleration to the upside. It all depends on the news driving the buying. Any positive news regarding a trade deal between the U.S. and China is likely to trigger the most volatile rally.

Bearish Scenario

A sustained move under 2711.50 will signal the presence of sellers. If this move generates enough downside momentum then look for a potential break into the short-term pivot at 2673.00.

Taking out this level will also put the index in a position to post a potentially bearish closing price reversal top. This could lead to the start of a 2 to 3 day correction.

Please let us know what you think in the comments below. 

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