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E-mini S&P 500 Index (ES) Futures Technical Analysis – Low Volume, Weak Follow-Through Rally – First Signs of Short-Term Top

Based on the early price action and the current price at 3228.00, the direction of the March E-mini S&P 500 Index the rest of the session on Monday is likely to be determined by trader reaction to Friday’s close at 3225.75.
James Hyerczyk
E-mini S&P 500 Index Up

March E-mini S&P 500 Index futures are trading slightly better shortly after the cash market opening. The market was buoyed to a new record high earlier in the session after China said it will cut import tariffs on a wide range of goods. Shares of Boeing are helping to support the early rally. They jumped more than 2% after the company fired CEO Dennis Muilenburg amid the 737 Max crisis.

At 15:12 GMT, March E-mini S&P 500 futures are trading 3228.00, up 2.25 or +0.06%.

Once again easing political risks are backing the rally early in the session. Overnight, China announced starting January 1, it will lower import tariffs on over 850 products ranging from frozen pork to some types of semiconductors.

Daily March E-mini S&P 500 Index

Daily Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was reaffirmed when buyers took out Friday’s high at 3229.50.

The main trend will change to down on a move through the last main bottom at 3071.00. This is not expected, but after the prolonged move up in terms of price and time, I wouldn’t be surprised by a closing price reversal top especially since the early rally was so weak and took place on low volume.

A close under 3225.75 will produce a closing price reversal top. It won’t change the trend to down, but it could lead to a 2 to 3 day correction.

The minor trend is also up. A trade through 3118.25 will change the minor trend to down. This will also shift momentum to the downside.

Another level to watch for a shift in momentum is 3192.00. This level withstood selling pressure twice last week.

Daily Technical Forecast

Based on the early price action and the current price at 3228.00, the direction of the March E-mini S&P 500 Index the rest of the session on Monday is likely to be determined by trader reaction to Friday’s close at 3225.75.

Bullish Scenario

A sustained move over 3225.75 will indicate the presence of buyers. Taking out today’s intraday high at 3234.25 will indicate the buying is getting stronger. The nearest uptrending Gann angle target comes in at 3262.25. Overtaking this angle will put the index in an extremely bullish position.

Bearish Scenario

A sustained move under 3225.75 will signal the presence of sellers. This will also put the index in a position to post a closing price reversal top on the daily chart.

Taking out Friday’s low at 3208.50 will indicate the selling is getting stronger. This could trigger a further break into 3192.00 and the uptrending Gann angle at 3190.25.

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