E-mini S&P 500 Index (ES) Futures Technical Analysis – January 31, 2018 Forecast

March E-mini S&P 500 Index futures are trading higher shortly before the cash market opening. At 1310 GMT, the index is trading 2837.00, up 12.50 or +0.44%. The market drew support from President Trump’s first State of the Union Address late Tuesday when he said he was going to ask Congress for $1.5 trillion in order to rebuild the country’s infrastructure.

Daily Technical Analysis

The main trend is up according to the daily swing chart. However, momentum has started to shift lower with the formation of a closing price reversal top on January 29. A trade through 2878.50 will negate the chart pattern and signal a resumption of the uptrend.

A trade through 2818.50 will indicate the selling is getting stronger.

The minor range is 2736.50 to 2878.50. Its retracement zone at 2807.50 to 2790.75 is the first downside target. Since the trend is up, look for buyers to show up on a test of this zone.

The main range is 2667.75 to 2878.50. If the selling continues then its retracement zone at 2773.00 to 2748.25 will become the next target zone.

Daily Technical Forecast

Based on the early price action, the direction of the index the rest of the session will be determined by trader reaction to an uptrending Gann angle at 2835.75.

A sustained move over 2835.75 will indicate the presence of buyers. This could drive the index into a steep downtrending Gann angle at 2846.50 and an uptrending Gann angle at 2848.50.

Overtaking 2848.50 will indicate the buying is getting stronger. This may generate the upside momentum needed to challenge a series of downtrending Gann angles at 2862.50, 2870.50 and 2874.50. The latter is the last potential resistance angle before the 2878.50 main top.

A sustained move under 2848.50 will signal the presence of sellers. The daily chart is wide open under this angle so if selling volume increases, we could see a plunge into 2807.50, followed by 2790.75.