E-mini S&P 500 Index (ES) Futures Technical Analysis – January 12, 2018 Forecast

March E-mini S&P 500 Index futures are trading higher early Friday. Buyers are building on yesterday’s solid gains. On Thursday, the catalyst was a weaker-than-expected U.S. producer inflation report. Today’s price action will likely be driven by the consumer inflation report and earnings.

Lower consumer inflation could trigger an acceleration to the upside because it would likely mean the Fed will have to cut back on the number of rate hikes it had planned for 2018.

Daily Technical Analysis

The main trend is up according to the daily swing chart. The uptrend resumed, after a one-day setback, on Thursday when buyers took out 2760.00.

The new minor bottom is 2736.50. A trade through this level will change the minor trend to down.

Today’s session begins with the index up 9 sessions from its last main bottom at 2667.75 on December 29. This puts the market in the window of time for a potentially bearish closing price reversal top. The formation of this chart pattern will not mean the trend is getting ready to turn lower, but it could lead to a 2 to 3 day correction.

Daily Technical Forecast

Early in the session, sellers tested a steep uptrending Gann angle at 2678.50. We’re going to call this support.

Thursday’s close is 2769.50. In order to maintain the upside bias I’d like to see the index stay positive for the session. A close under this price will produce a closing price reversal top on the daily chart.

An intraday break under 2769.50 will be the first sign of weakness. However, a sustained move under the angle at 2768.50 could trigger an acceleration to the downside.

Taking out 2768.50 with conviction could drive the index into the next uptrending Gann angle at 2752.00. This is another trigger point for a possible break into a longer-term uptrending Gann angle at 2739.75.

It’s a tight squeeze but the key numbers to watch today for support are 2769.50 to 2768.50.