E-mini S&P 500 Index (ES) Futures Technical Analysis – Momentum Shifts to Down if 3878.25 Fails to Hold

March E-mini S&P 500 Index futures are edging higher early Thursday as investors try to reverse yesterday’s losses and regain February’s upside momentum. The index hit a record high on Wednesday before swinging lower in a volatile trading session.

The rally in the benchmark index took a pause on Wednesday as big tech stocks slid amid an ongoing rotation of portfolio holdings that gave a boost to energy shares and kept the overall market near record highs.

At 09:52 GMT, March E-mini S&P 500 Index futures are trading 3915.75, up 12.75 or +0.33%.

In other news, stocks shrugged off remarks by Federal Reserve Chairman Jerome Powell, who reassured investors that interest rates will remain low for some time to spur the economy and jobs growth, but provided no new insights on monetary policy.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, but momentum could shift to the downside if Wednesday’s closing price reversal top is confirmed later today.

A trade through 3928.50 will negate the closing price reversal top and signal a resumption of the uptrend.

The main trend will change to down on a move through 3656.50. This is not likely, but a trade through 3878.25 will confirm the closing price reversal top. This will also shift momentum to the downside.

A closing price reversal top confirmation does not signal a change in trend, but it could fuel the start of a 2 to 3 correction equal to at least 50% of the last rally. In this case, 3792.50 would become the primary downside target.

The minor range is 3928.50 to 3878.25. The index is currently straddling its 50% level at 3903.25.

Daily Swing Chart Technical Forecast

Based on the early price action, the direction of the March E-mini S&P 500 Index on Thursday is likely to be determined by trader reaction to the pivot at 3903.25.

Bullish Scenario

A sustained move over 3903.50 will indicate the presence of buyers. If this creates enough upside momentum then look for a retest of 3928.50. Taking out this level will signal a resumption of the uptrend and a potential acceleration to the upside.

Bearish Scenario

A sustained move under 3903.25 will signal the presence of sellers. The first downside target is yesterday’s low at 3878.25.

Taking out 3878.25 will confirm the closing price reversal top and signal a shift in momentum. If the downside momentum begins to accelerate then look for the selling to possibly extend into the short-term 50% level at 3792.50.

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