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E-mini S&P 500 Index (ES) Futures Technical Analysis – No Resistance, but Reversal Top Possible

By:
James Hyerczyk
Published: Jan 7, 2021, 16:18 UTC

The direction of the March E-mini S&P 500 Index into the close will be determined by trader reaction to 3740.50.

E-mini S&P 500 Index

In this article:

March E-mini S&P 500 Index futures are trading higher on Thursday as bets on more pandemic aid under a Democrat-controlled U.S. Congress eclipsed data showing elevated levels of unemployment claims.

After a muted start to the week, financials and industrial stocks powered the benchmark S&P 500 to an all-time high on Thursday in hopes that some of President-elect Joe Biden’s policies could speed up a vaccine-driven recovery.

At 15:58 GMT, March E-mini S&P 500 Index futures are trading 3799.25, up 58.75 or +1.57%.

The number of Americans filing for jobless benefits unexpectedly dipped last week while staying extremely high, a Labor Department report showed, with the job market recovery appearing to stall as COVID-19 threatens to overwhelm the country.

Bank of America Corp, Citigroup Inc, JPMorgan Chase & Co and Goldman Sachs rose in pre-market trading as the 10-year Treasury yield hovered near 1%.

Daily March E-mini S&P 500 Index

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was reaffirmed earlier in the session when buyers took out Wednesday high. A trade through 3596.00 will change the main trend to down.

The minor trend is also up. A trade through 3652.50 will change the minor trend to down. This will also shift momentum to the downside.

The nearest potential support levels are 3726.00, 3697.75 and 3648.25. These 50% level will continue to move up as prices move higher. They are known as rolling 50% levels.

Daily Swing Chart Technical Forecast

Due to the prolonged move up in terms of price and time, the direction of the March E-mini S&P 500 Index into the close will be determined by trader reaction to 3740.50.

Bullish Scenario

A sustained move over 3740.50 will indicate the presence of buyers. Taking out the intraday high at 3799.50 will indicate the buying is getting stronger. Since there is no resistance, this move could trigger an acceleration to the upside.

Bearish Scenario

A sustained move under 3740.50 will signal the presence of sellers. Crossing to the weak sides of the 50% levels at 3726.00 and 3697.75 will indicate the selling pressure is getting stronger.

A close under 3740.50 will form a closing price reversal top. If confirmed, this could trigger the start of a 2 to 3 day correction.

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

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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