E-mini S&P 500 Index (ES) Futures Technical Analysis – Looking for Short-Term Break into 3285.25-3268.00
March E-mini S&P 500 Index futures are down late Friday as investors book profits ahead of the weekend in reaction to worries over the coronavirus’ impact on the Chinese economy. China’s National Health Commission on Friday confirmed 31,131 cases of the deadly pneumonia-like virus in the country, with 636 deaths. Some traders feel this is large enough to raise concerns of a slowing economy.
At 20:09 GMT, March S&P 500 Index futures are trading 3327.50, down 17.50 or -0.53%.
Haibin Zhu, a China equity strategist at JPMorgan cut his China GDP growth estimate to 1% for the first quarter. Ed Hyman, chairman of Evercore ISI, sees 0% growth for the Chinese economy this quarter.
Daily Technical Analysis
The main trend is up according to the daily swing chart. A trade through 3357.75 will signal a resumption of the uptrend. The main trend will change to down on a move through the swing bottom at 3212.75. This is not likely before the close, but there is room for a normal 50% to 61.8% retracement.
The minor trend is also up. However, a new minor top was formed at 3357.75.
The short-term range is 3212.75 to 3357.75. Its retracement zone at 3285.25 to 3268.00 is the primary downside target. Since the main trend is up, buyers are likely to come in on a test of this area.
The main range is 3071.00 to 3357.75. Its retracement zone at 3214.25 to 3180.50 is a major support zone. This zone is controlling the longer-term direction of the index.
Based on the late session price action, there may be enough downside momentum in the market to drive the March E-mini S&P 500 Index into the uptrending Gann angle at 3292.75. Look for buyers on the first test of this angle. If it fails then look for the selling to possibly extend into the short-term 50% level at 3285.25.
On the upside, overtaking 3357.75 will be the first sign of strength. Crossing to the strong side of the steep uptrending Gann angle at 3372.75 will put the index in a bullish position.