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James Hyerczyk
E-mini S&P 500 Index

March E-mini S&P 500 Index futures are drifting slightly lower on Wednesday shortly before the cash market opening. The inside move suggests investor indecision and impending volatility. President Trump’s State of the Union address failed to give investors any insight into future policy so traders are likely to continue to respond to earnings reports. Late Wednesday, Fed Chair Jerome Powell is scheduled to speak and is expected to answer questions about monetary policy.

At 14:11 GMT, March E-mini S&P 500 Index futures are trading 2731.75, up 0.75 or +0.02%.

Daily March E-mini S&P 500 Index

Daily Technical Analysis

The main trend is up according to the daily swing chart. Given the prolonged move up in terms of price and time, traders should start watching for signs of a top like a closing price reversal top. It his chart pattern is formed and confirmed then look for the start of a 2 to 3 day correction.

A trade through 2737.75 will signal a resumption of the uptrend. The main trend will change to down on a trade through 2612.50.

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

The market is also trading on the strong side of a major retracement zone at 2711.50 to 2636.00. This zone is controlling the near-term direction of the market. Look for the upside bias to continue as long as the index holds this area. Traders should treat it like support.

The short-term range is 2612.50 to 2737.75. Its 50% level at 2675.00 is a minor support level that falls inside the major retracement zone.


Daily Technical Forecast

Based on the early price action, the direction of the index the rest of the session is likely to be determined by trader reaction to the Fibonacci level at 2711.50.

Bullish Scenario

A sustained move over 2711.50 will indicate the presence of buyers. If this creates enough upside momentum then look for buyers to take a run at 2737.75. Taking out this level will signal a resumption of the uptrend.

The daily chart indicates there is plenty of room to the upside with the next target a main top at 2819.00.

The key issue is how are we going to get to 2819.00? Will it be a slow grind or a spike to the upside?

Bearish Scenario

A sustained move under 2711.50 will signal the presence of sellers. This is a potential trigger point for an acceleration into the minor 50% level at 2675.00. This is followed by 2636.00.

Traders should also watch for a higher-higher, lower-close chart pattern. This will indicate the selling is greater than the buying at current price levels.

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

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