E-mini S&P 500 Index (ES) Futures Technical Analysis – October 2, 2014, Forecast

Sellers hit the December E-mini S&P 500 Index hard on Wednesday when the market took out a major uptrending angle, sending the index into a major retracement zone. How investors react to this zone will set the tone for the day.

The selling pressure started when the index took out the long-term uptrending angle from the 1882.75 bottom at 1958.75 today.

The main range is 1882.75 to 2014.50. The retracement zone formed by this range is 1948.50 to 1933.00. This primary target was hit on Wednesday with traders finding support near the lower or Fibonacci level at 1933.00.

A follow-through break through 1933.00 could trigger a break into the next uptrending angle at 1920.75. This is followed by another angle at 1901.75.

Holding 1933.00 will indicate profit-taking or aggressive counter-trend buying. The buying will get stronger if 1942.50 fails to hold as resistance. This should lead to a rally into the 50% level at 1948.50. This is another potential resistance level.

A sustained move over 1948.50 could lead to a rally into an uptrending angle at 1958.75. The daily chart indicates there is room to the upside if this angle is taken out with 1978.50 the next potential upside target.

Since the market starts the session inside of a major retracement zone, trader reaction to the 50% and 61.8% levels will determine the tone for the session. Taking out the upper or 50% level at 1948.50 could lead to a breakout to the upside while a sustained move through the lower or 61.8% level at 1933.00 will be bearish.