E-mini S&P 500 Index (ES) Futures Technical Analysis – First Downside Target 2807.50 to 2790.75

March E-mini S&P 500 Index futures are trading sharply lower on Tuesday as investors react for a second day to the threat of rising global interest rates and inflation. Some investors now believe the Fed will have to act more swiftly in raising rates this year.

Investors are also paring positions ahead of President Trump’s first State of the Union address later tonight and the release of the U.S. Federal Reserve monetary policy statement on Wednesday.

Daily Technical Analysis

The main trend is up according to the daily swing chart. However, yesterday’s closing price reversal top and today’s confirmation of the chart pattern signals a shift in momentum to down. This could lead to a 2 to 3 day correction, or 50% to 61.8% retracement of the last rally.

A trade through 2878.50 will negate the chart pattern and signal a resumption of the uptrend.

The minor range is 2736.50 to 2878.50. If the selling pressure continues then we could see a test of its retracement zone at 2807.50 to 2790.75. Since the main trend is up, buyers could show up on a test of this area.

The main range is 2667.75 to 2878.50. Further selling pressure could drive the index into its retracement zone at 2773.00 to 2748.25.

Daily Technical Forecast

Based on the early price action, the direction of the index the rest of the session will be determined by trader reaction to a pair of uptrending Gann angles at 2840.50 and 2827.75. These angles have been guiding the market higher since late December.

A sustained move over 2840.50 will indicate the return of buyers. This could trigger a rebound into 2855.00.

A sustained move under 2827.75 could do the most damage to the uptrend. It could trigger an acceleration to the downside with the first major target the 50% level at 2807.50. This is another trigger point for a further decline into the Fibonacci level at 2790.75.

If the selling pressure persists this week then prices will continue to fall until the index runs into a value zone. The two best target zones are 2807.50 to 2790.75 and 2773.00 to 2748.25.