E-mini S&P 500 Index (ES) Futures Technical Analysis – July 21, 2017 Forecast

September E-mini S&P 500 Index futures are trading flat-to-lower shortly before the cash market opening. The market is also trading inside yesterday’s range, suggesting investor indecision and impending volatility.

The market continues to be driven by momentum and news. The price action has been bullish this week based on the higher-high, higher-low formation but it hard to tell if its new investors coming in or just a function of sector rotation.

Earnings have been strong, but outside factors have been limiting the upside action. The technology sector has been supporting the market, healthcare, banking, consumer staples and energy, have at time slowed down the upside momentum. I think we would see a much stronger rally if all the sectors were trending higher, but that hasn’t been the case this week.

The main trend is up according to the daily swing chart, but we’re still in the window of time for a potentially bearish closing price reversal top. Therefore, trader reaction to yesterday’s high at 2476.50 will set the tone for the day.

If buyers take out 2476.50 then they are going to have to sustain the move because a break back under yesterday’s close at 2471.25 will put the index in a position to form a closing price reversal top.

If enough selling comes in to stop the market before it takes out 2476.50 then the sellers are going to try to take out yesterday’s low at 2465.50. If successful, this will make 2476.50 a new minor top. This will be the first sign that the selling is greater than the buying at current price levels.

There is no upside target at this time, but if there is a steep sell-off then one major target is last week’s close at 2456.00. A close below this level could set up the market for a possible move into 2439.75 next week.