E-mini S&P 500 Index (ES) Futures Technical Analysis – January 27, 2015 Forecast

March E-mini S&P 500 Index futures are trading lower shortly before the cash market opening. There was no follow-through to the upside following Monday’s strong rebound rally. This suggests trader indecision. It also may mean that investors are respecting last Friday’s potentially bearish closing price reversal top.

There are a number of U.S. economic reports today, but the main story is the snow storm currently hitting the U.S. East Coast. Some traders believe that this could mean lower-than-average volume and volatility. Today is also the start of a two-day U.S. Federal Reserve monetary policy committee meeting. Investors may use this meeting as an excuse to sit on the sidelines until late Wednesday when the Fed makes its next monetary policy statement.

Technically, the main trend is up on the daily chart, but last Friday’s closing price reversal top could’ve been an indication that the selling is greater than the buying at current price levels, especially since valuations are at a ten-year high.

The potentially bearish chart pattern was confirmed on Monday, but there was little follow-through and the market closed higher for the session. If the selling resumes today then look for investors to go after the short-term retracement zone at 2016.25 to 2005.50.

For longer-term investors, the main range is 1961.50 to 2008.75. This makes its 50% level at 2025.25 a major pivot area. This level held as support on Monday.

The key Gann angle to watch comes in at 2048.75. Trader reaction to this price should set the tone for the day. Holding above it could trigger a rally to 2066.25 to 2068.75.

A failure to hold above 2048.75 could lead to a sustained move to the downside with potential targets at 2025.25, 2018.25, 2016.50 and 2005.50. The best support cluster is 2018.25 to 2016.50.

Watch the price action and order flow at 2048.75. This should tell us whether the buyers or sellers are in control. Don’t be surprised if volume and volatility are below average today because of the snow storm hitting New York City.