December E-mini S&P 500 Index futures are trading higher shortly before the cash market opening. Optimism over tax reform is helping to support the index.
Daily Technical Analysis
The main trend is up according to the daily swing chart. It was reaffirmed earlier today when the futures contract posted a new all-time high.
Daily Technical Forecast
Based on the early price action especially the higher-high and the extension of the uptrend. The direction of the index today is likely to be determined by trader reaction to yesterday’s close at 2601.75.
A sustained move over 2601.75 will signal the presence of buyers. This could extend the rally into today’s high at 2606.75. Overtaking the intraday later in the session will indicate the buying is getting stronger.
A sustained move under 2601.75 will indicate the presence of sellers. This would put the market in a position to form a potentially bearish closing price reversal top which could lead to a 2 to 3 day correction.
The nearest support angle comes in at 2587.50 today, followed by a 50% level at 2580.50.
Today, it’s not about the price levels, but the chart pattern. Essentially, now that the index has posted a higher-high, it has to close higher, or we could see the start of a short-term correction.