E-mini S&P 500 Index (ES) Futures Technical Analysis – March 22, 2018 Forecast

June E-mini S&P 500 Index futures are expected to open sharply lower based on the pre-market trade. Investors are following through to the downside after yesterday’s sell-off in reaction to the Fed’s monetary policy announcement. Additional selling pressure is being generated by concerns over tariffs against China and possible retaliation from the world’s second largest economy.

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 the closing price reversal top on March 13 at 2807.25.

Earlier today, the index took out 2697.25, creating a new low for the week. If the downside momentum continues then the selling could extend over the near-term into the March 2 main bottom at 2651.75.

Today is the seventh day down from the last main top. This puts the market in the window of time for a potential closing price reversal bottom.  If formed, this could lead to the start of a 2 to 3 day rally.

Daily Swing Chart Technical Forecast

Based on the early trade, the direction of the index today is likely to be determined by trader reaction to the 50% level at 2708.00.

A sustained move under 2708.00 will indicate the presence of sellers. This could generate the downside momentum needed to challenge the next major 50% level at 2669.75, followed by a main bottom at 2651.75 and a major Fibonacci level at 2637.50.

Overtaking the 50% level at 2708.00 will signal the presence of buyers. Overcoming 2718.25 will turn the index higher for the session. This could trigger an intraday short-covering rally, setting up the index for a possible closing price reversal bottom on the daily chart.

If enough upside momentum is created by the recapturing of 2708.00 then 2748.25 will become the primary upside target.