E-mini S&P 500 Index (ES) Futures Technical Analysis – Next Big Challenge for Bulls is 4697.50 – 4707.75

December E-mini S&P 500 Index futures are edging higher shortly after the cash market opening as traders try to recover from yesterday’s potentially bearish closing price reversal top.

For a second session, weakness in the technology sector is a major drag on the benchmark index. Traders could also be reacting to mixed economic news. Flash Manufacturing PMI came in higher than last month, but missed the estimate. Flash Services PMI, however, came in lower than last month and the forecast.

At 14:57 GMT, December E-mini S&P 500 Index futures are trading 4695.00, up 11.00 or +0.23%.

Look for heightened volatility as volume continues to drop ahead of Thursday’s U.S. bank holiday. Volume is also expected to come in below average on Friday.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, momentum is trending lower following the confirmation of yesterday’s closing price reversal top earlier in the session.

A trade through 4740.50 will negate the closing price reversal top and signal a resumption of the uptrend. A move through 4625.25 will change the main trend to down.

The minor trend is down. It turned down earlier today when sellers took out 4668.00. This confirmed the shift in momentum.

The market is currently straddling a 50% level at 4683.00.

The minor range is 4740.50 to 4654.50. Its retracement zone at 4697.50 – 4707.75 is potential resistance.

On the downside, the nearest support is a pivot at 4642.00, followed by another pivot at 4520.25.

Daily Swing Chart Technical Forecast

The direction of the December E-mini S&P 500 Index into the close on Tuesday will be determined by trader reaction to 4683.00.

Bullish Scenario

A sustained move over 4683.00 will indicate the presence of buyers. If this move creates enough upside momentum then look for the move to extend into 4697.50 – 4707.75.

Aggressive counter-trend sellers could come in on the first test of 4697.50 – 4707.75. They are going to try to form a potentially bearish secondary lower top.

Taking out 4707.75 will indicate strength. This could trigger a further rally into 4740.50.

Bearish Scenario

A sustained move under 4682.75 will signal the presence of sellers. This could trigger a retest of the intraday low at 4654.50, followed closely by the 50% level at 4642.00.

The 50% level at 4642.00 is the last potential support before the 4625.25 main bottom. Taking out this level will change the main trend to down.