E-mini S&P 500 Index (ES) Futures Technical Analysis – New Swing Bottom Formed at 3788.50

March E-mini S&P 500 Index futures are trading higher shortly after the cash market close as investors digested a batch of corporate earnings results, while an expected policy announcement from the Federal Reserve on Wednesday likely capped gains.

In the cash market, the benchmark S&P 500 Index slipped slightly from a record higher on Tuesday before closing lower for the session as Wall Street geared up for the heart of corporate earnings season including reports from a slew of blue-chip companies and major tech players.

At 21:25 GMT, March E-mini S&P 500 Index futures are trading 3851.00, up 2.50 or +0.06%.

Futures jumped after the cash market close after Microsoft stock rose as much as 6% in extended trading following the release of its fiscal-quarter earnings report.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was reaffirmed on Tuesday when buyers took out 3859.75. A trade through 3788.50 will change the main trend to down.

The new minor range is 3788.50 to 3862.25. Its 50% level at 3825.25 is support.

The next minor range is 3740.50 to 3862.25. Its retracement zone at 3801.25 to 3787.00 is another key support area.

Short-Term Outlook

The main bottom moved up again on Tuesday, bringing with it a new batch of sell-stops from nervous trend traders. Because of this, we could see an acceleration to the downside if 3788.50 fails as support.

But as long as the index continues to post higher tops and higher bottoms, the uptrend will remain intact.

Our biggest fears at current price levels are investor complacency and overvaluation. Both could set up investors for a steep break so it’s important for short-term traders to have in mind trailing stops to protect some of their profits.

Watch the VIX for signs of complacency. The VIX tends to drop when investors have a “what me worry” attitude.

For a look at all of today’s economic events, check out our economic calendar.