E-mini S&P 500 Index (ES) Futures Technical Analysis – November 7, 2018 Forecast

The broad-based U.S. stock index is trading higher on Wednesday, shortly after the opening. The catalysts behind the rally are the mid-term election results. Democrats won back the House of Representatives and the Republicans retained control of the Senate. This was the outcome that market participants were expecting, dampening predictions of heightened volatility.

At 1500 GMT, December E-mini S&P 500 Index futures were trading 2777.50, up 18.50 or +0.67%.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. However, momentum is trending higher. The main trend will change to up on a trade through 2824.25.

Today is the seventh day up from the last main bottom. This puts the index inside the window of time for a closing price reversal top. This could trigger the start of a 2 to 3 day correction.

The price action is being controlled by a number of retracement levels. You can see from the chart that the way of least resistance is up. Any selling pressure is likely to be labored.

Daily Swing Chart Technical Forecast

Based on the early price action, the direction of the December E-mini S&P 500 Index the rest of the session is likely to be determined by trader reaction to the 50% level at 2775.00.

A sustained move over 2775.00 will indicate the presence of buyers. If this creates enough upside momentum then look for a surge into the Fib level at 2815.50, followed closely by the main top at 2824.25. This is a potential trigger point for an acceleration to the upside since the daily chart shows there is no major resistance until 2947.00.

A sustained move under 2775.00 will signal the presence of sellers. This could trigger the start of a labored break with potential support levels layered at 2748.50 and 2739.75.

Taking out 2739.75 could trigger an even steeper break to 2713.50.

Traders should also watch yesterday’s close at 2759.00. A break back under this level will put the index in a position to form a potentially bearish closing price reversal top.