E-mini S&P 500 Index (ES) Futures Technical Analysis – Momentum Shift Could Lead to Test of 3053.00 to 3052.25

December E-mini S&P 500 Index futures are trading lower shortly after the cash market opening on Wednesday. Throughout the pre-market session, the index posted a mostly sideways trade after failing to follow-through to the downside following yesterday’s potentially bearish closing price reversal top chart pattern.

Fundamentally, earnings season is winding down and the lack of fresh news over U.S.-China trade relations may be creating enough uncertainty to encourage some light profit-taking. Investors could also be having trouble with valuations after the month-long rally.

At 14:30 GMT, December E-mini S&P 500 Index futures are trading 3071.25, down 0.75 or -0.03%.

Daily Technical Analysis

The main trend is up according to the daily swing chart, however, momentum is trending lower following Tuesday’s closing price reversal top and today’s subsequent confirmation of the chart pattern.

A trade through 3085.75 will negate the chart pattern and signal a resumption of the uptrend. The main trend will change to down on a trade through 3020.25.

The formation of the closing price reversal top doesn’t mean the trend is changing to down, but it could trigger the start of a 2 to 3 day counter-trend trade. This will alleviate some of the upside pressure.

The short-term range is 3020.25 to 3085.75. Its 50% level or pivot at 3053.00 is the first downside target. Since the main trend is up, buyers are likely to show up on the first test of this level.

Daily Technical Forecast

Based on the early price action and the current price at 3071.25, the direction of the December E-mini S&P 500 Index the rest of the session is likely to be determined by trader reaction to Tuesday’s close at 3072.00.

Bearish Scenario

A sustained move under 3072.00 will indicate the presence of sellers. If this move can generate enough downside momentum then look for the selling to possibly extend into the support cluster at 3053.00 to 3052.25. Look for a technical bounce on the first test of this area. This is followed closely by another uptrending Gann angle at 3047.00.

Taking out 3047.00 could trigger a plunge into the next uptrending Gann angle at 3033.75.

Bullish Scenario

A sustained move over 3072.00 will signal the presence of buyers. The first target is an uptrending angle at 3084.25. Overcoming this angle will indicate the buying is getting stronger. Taking out 3085.75 will signal a resumption of the uptrend. This could also trigger an acceleration to the upside.