E-mini S&P 500 Index (ES) Futures Technical Analysis – In Window of Time for Closing Price Reversal Bottom

E-mini S&P 500 Index futures are trading slightly better and inside yesterday’s wide range as traders take a breather after yesterday’s steep sell-off. The move started when buyers failed to overcome a major 50% level at 2748.50 and accelerated to the downside when sellers took out the Fibonacci level at 2701.75 and the main bottom at 2696.75.

At 0518 GMT, December E-mini S&P 500 Index futures are trading 2664.75, up 0.50 or +0.01%.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. Given the prolonged move down in terms of price and time, the only chart pattern that could put an immediate halt to the sell-off is a closing price reversal bottom.

The next major downside targets are the May 3 bottom at 2602.75 and the April 2 bottom at 2562.50. The main trend will change to up if buyers can take out 2824.25.

The main range 2562.50 to 2947.00. Its retracement zone at 2748.50 to 2701.75 is controlling the near-term direction of the index. This zone is now resistance. Holding below this zone will help maintain the downside bias.

Daily Swing Chart Technical Forecast

Based on yesterday’s close at 2664.25 and the early price action, the direction of December E-mini S&P 500 Index futures will likely be determined by trader reaction to yesterday’s low at 2652.25.

Bullish Scenario

Holding 2652.25 will indicate that aggressive counter-trend buyers are coming in to support the market. If this rally gains traction then look for the rally to possibly extend into the main Fibonacci level at 2701.75.

Since the main trend is down, look for sellers to come in on a test of 2701.75. Overcoming this level could trigger an acceleration into 2748.50.

Bearish Scenario

Taking out 2652.25 with conviction will indicate the selling is getting stronger. If this creates enough downside momentum then look for the selling to extend into 2602.75, followed by 2562.50.

Closing Price Reversal Scenario

Taking out 2652.25 then recovering yesterday’s close at 2664.25 will indicate the buying is greater than the selling at current price levels. This will put the index in a position to form a potentially bullish closing price reversal bottom. This could lead to a 2 to 3 day counter-trend rally.