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E-mini S&P 500 Index (ES) Futures Technical Analysis – March 21, 2018 Forecast

By:
James Hyerczyk
Published: Mar 21, 2018, 13:45 UTC

Given the early price action, the direction of the index today is likely to be determined by trader reaction to the short-term 50% level at 2729.50.

E-mini Dow Jones Industrial Average

June E-mini S&P 500 Index futures are trading lower shortly before the cash market opening. Investors are positioning themselves ahead of a number of U.S. Federal Reserve announcements at 1800 GMT, including its interest rate decision, monetary policy statement and economic projections.

A 25-basis point rate hike has been priced into the market. Investors want to know whether the Fed will raise rate two or three more additional times this year in an effort to stop the economy from overheating.

A hawkish Fed should put pressure on the Dow. A dovish Fed is likely to fuel a short-covering rally. However, gains may be limited by concerns over trade wars, additional tariffs and turmoil in the White House.

E-mini S&P 500 Index
Daily June E-mini S&P 500 Index

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, momentum has been trending lower since the formation of a closing price reversal top at 2807.25 on March 12.

A trade through 2697.25 will indicate the selling is getting stronger. If the downside momentum is strong enough, we could see a break into the next main bottom at 2651.75.

Since there are three parts to today’s Fed announcements or four if you count Fed Chair Jerome Powell’s press conference, traders should watch for volatile two-sided trading and a possible closing price reversal bottom.

Daily Swing Chart Technical Forecast

Given the early price action, the direction of the index today is likely to be determined by trader reaction to the short-term 50% level at 2729.50.

A sustained move under 2729.50 will indicate the presence of sellers. This could lead to a test of another 50% level at 2707.75. This price is a possible trigger point for an acceleration to the downside. The first target is 2697.25, followed by 2669.75.

The main 50% level at 2669.75 is also a trigger point for the start of a steep break. Potential targets include 2651.75 and 2637.50.

Overcoming 2729.50 will signal the presence of buyers. This could fuel a move into a potential resistance cluster at 2749.25 to 2752.25. This area is very critical to the longer-term direction. If sellers stop a rally at this level then the index could eventually roll over to the downside. Overcoming 2752.25, however, will indicate that buyers have returned, fueling the possibility of a huge rally.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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