E-mini S&P 500 Index (ES) Futures Technical Analysis – In Position to Challenge 4539.50 Early Friday

December E-mini S&P 500 Index futures are inching higher late in the session on Thursday after recovering an earlier loss. The selling was fueled by a drop in IBM shares following the release of its quarterly report late Wednesday. The potential impact of supply chain disruptions and labor shortages on profits also weighed on prices.

In the cash market, the benchmark S&P 500 Index edged lower from the opening, but was just about 10 points short of its early September record, but a rise in mega-cap growth companies helped turn the index higher late in the session.

At 19:28 GMT, December E-mini S&P 500 Index futures are trading 4535.75, up 7.75 or +0.17%.

In economic news, data showed the number of Americans filing new claims for unemployment benefits dropped to a 19-month low last week, pointing to a tightening labor market, though a shortage of workers could keep the pace of hiring moderate in October.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade thorough yesterday’s high at 4532.25 signaled a resumption of the uptrend. A move through 4539.50 will reaffirm the uptrend and set a new contract high.

A trade through 4260.00 will change the main trend to down. This is highly unlikely, but the index is currently inside the window of time for a closing price reversal top. This won’t change the main trend to down, but if confirmed, it could trigger the start of a 2 to 3 day correction.

The short-term range is 4539.50 to 4260.00. The index is currently trading on the strong side of its retracement zone at 4432.75 to 4399.75. This is new support.

Daily Forecast

The direction of the December E-mini S&P 500 Index into the close on Thursday will be determined by trader reaction to 4528.00.

Bullish Scenario

A sustained move over 4528.00 will indicate the presence of buyers. If this move creates enough upside momentum then look for a test of the record high at 4539.50 early in the session on Friday.

Bearish Scenario

A close under 4528.00 will signal the presence of sellers. This will also form a potentially bearish closing price reversal top. If confirmed on Friday, then this could trigger the start of a 2 to 3 day correction.