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James Hyerczyk
E-mini S&P 500 Index

March E-mini S&P 500 Index futures are trading lower shortly before the cash market opening, but inside yesterday’s range. The chart pattern suggests investor indecision and impending volatility. The catalyst behind the selling pressure is increasing worries about a broadening global economic slowdown. Uncertainty over U.S.-China trade relations is also fueling the selling pressure.

At 14:20 GMT, March E-mini S&P 500 Index futures are trading 2690.75, down 13.25 or -0.49%.

Daily March E-mini S&P 500 Index

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 2737.75 will signal a resumption of the uptrend. The main trend will change to down on a move through 2612.50.

The index is also trading lower for the week. A close under 2704.25 will form a potentially bearish closing price reversal top. This could trigger the start of a 2 to 3 week correction.

The index is currently trading inside a major retracement zone at 2636.00 to 2711.50. This zone is controlling the near-term direction of the index. Trading inside the zone will neutralize the uptrend.

The short-term range is 2612.50 to 2737.75. Its 50% level or pivot at 2675.00 is the next downside target. Since the main trend is up, buyers are likely to come in on the first test of this level. Look for a technical bounce.


Daily Swing Chart Technical Forecast

Based on the early price action, the direction of the March E-mini S&P 500 Index the rest of the session on Friday is likely to be determined by trader reaction to the major Fibonacci level at 2711.50.

Bearish Scenario

A sustained move under 2711.50 will signal the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into 2675.00. Watch for buyers on the initial test of this level.

Taking out 2675.00 could trigger an acceleration to the downside with the next target the major 50% level at 2636.00.

Bullish Scenario

Overtaking 2711.50 will indicate the return of buyers. If this move generates enough upside momentum then look for the rally to possibly extend into 2737.75.

Weekly Closing Price Reversal Top

Watch the price action and read the order flow on a test of 2704.25 all session. This is last week’s close. Bullish traders will try to overtake this level in an effort to defend the uptrend. A close under this level could set up the start of a 2 to 3 week correction.

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