E-mini S&P 500 Index (ES) Futures Technical Analysis – January 20, 2017 Forecast

March E-mini S&P 500 Index futures are trading higher shortly before the cash market opening. The strong recovery on Thursday and today’s early price action suggests that buyers are coming in on the dips, perhaps expressing optimism over Trump’s inauguration.

Technical Analysis

The main trend is up according to the daily swing chart. The first target on the swing chart is the minor top at 2273.50. This is followed by the main top at 2277.00.

The first target on the downside is the minor bottom at 2253.00. This is followed by the next minor bottom at 2248.50.

The short-term range is 2277.00 to 2248.50. Its 50% level or pivot is 2262.75. The market has been straddling this level for five sessions. It is essentially controlling the short-term direction of the market.

The intermediate range is 2228.00 to 2277.00. Its retracement zone at 2252.50 to 2246.75 is the primary downside target. This zone provided support on January 12 and January 19.

Forecast

Based on the current price at 2265.50 and the earlier price action, the direction of the index today is likely to be determined by trader reaction to a downtrending angle at 2268.00 and the pivot at 2262.75.

A sustained move over 2268.00 will indicate the presence of buyers. This could trigger an acceleration into the next downtrending angle at 2272.50. This is the last potential resistance angle before the minor top at 2273.50 and the main top at 2277.00.

The chart indicates that if 2277.00 is taken out then the next target comes in at 2280.00.

A sustained move under 2268.00 will signal the presence of sellers. Taking out 2262.75 will signal that the selling pressure is getting stronger. This is followed by a series of targets at 2259.00, 2254.00 and 2252.50.

The latter is the trigger point for an acceleration into 2248.50 then 2246.75.

Watch the price action and read the order flow at 2268.00 and 2262.75 today. Trader reaction to these levels will tell us if the buyers or sellers are in control today. Volatility may return today when Trump gives his inauguration speech at 1715 GMT.