E-mini S&P 500 Index (ES) Futures Technical Analysis – July 16, 2018 Forecast

The benchmark S&P 500 Index is trading lower shortly after the opening as buyers backed away from an early session rally when technology stocks fell and the energy sector weakened in reaction to a plunge in crude oil prices. The current intraday chart pattern suggests a potentially bearish closing price reversal top may be forming.

At 1450 GMT, September E-mini S&P 500 Index futures are trading 2796.50, down 6.75 or -0.24%.

Daily Technical Analysis

The main trend is up according to the daily swing chart. It was reaffirmed earlier today when early buyers took out Friday’s high at 2807.25. However, stalling at 2809.00 then breaking back under 2807.25 suggests the rally was fueled by buy stops rather than new buying.

The minor trend is also up. A trade through 2793.25 will make 2809.00 a new minor top. A trade through 2765.75 will change the minor trend to down and shift momentum to the downside.

The early price action suggests a potentially bearish closing price reversal top chart pattern may be forming. A close under 2803.25 will form this pattern. This could lead to the start of a 2 to 3 day correction.

The short-term range is 2765.75 to 2809.00. Its 50% level at 2787.25 is a potential downside target. This price is also likely to act like a pivot if tested.

Daily Technical Forecast

Based on the early higher-high chart pattern and the prolonged move up in terms of price and time, the direction of the September E-mini S&P 500 Index the rest of the session is likely to be determined by trader reaction to Friday’s close at 2803.25.

A sustained move under 2803.25 will signal the presence of sellers. They are going to try to form the closing price reversal top. If the selling pressure continues under this level then look for a move into the 50% level at 2787.25, followed by the steep uptrending Gann angle at 2781.25. Watch for a technical bounce on the first test of these levels.

If 2781.25 fails as support then look for the selling to continue into a long-term downtrending Gann angle at 2773.00, followed by the minor bottom at 2765.75.

A sustained move over 2803.25 will indicate the presence of buyers. This could lead to a retest of 2809.00, followed by the March 13 top at 2814.00.

Watch the price action and read the order flow at 2803.25 all session. We’re either going to close over this level and continue the uptrend, or the selling will be strong enough to hold prices below this level and form a closing price reversal top.