E-mini S&P 500 Index (ES) Futures Technical Analysis – October 3, 2014, Forecast

Unlike the E-mini Dow and E-mini NASDAQ-100 indices, the December E-mini S&P 500 Index futures contract took out its major retracement zone when it traded on the bearish side of the Fibonacci level at 1933.00. Fortunately, buyers were able to stop the slide when the index tested a major uptrending angle from the 1882.75.

The low of the session was 1918.25, but the angle moves up to 1921.75 today. Both of these levels are potential support along with the Fibonacci level at 1933.00.

Overcoming the steep downtrending angle at 1934.50 will be the first sign of strength today. Taking out the 50% level at 1948.75 will be the second. This could trigger a fast rally into 1960.75.

The short-term range is 2014.50 to 1918.25. Its retracement zone at 1966.50 to 1977.75 will be the best target if the momentum is strong enough. Another downtrending angle at 1974.50 is also a potential target. Crossing to the bullish side of 1977.75 will be extremely bullish and could lead to a test of 1994.50.

The tone of the market will turn friendly if the market rallies through 1934.50. Upside momentum begins to pick up over 1948.75. The tone will be bearish if 1933.00 fails as support, but don’t expect an acceleration to the downside until 1918.25 is taken out. The last angle before the main bottom comes in at 1902.25. The main bottom at 1882.75.

Simply stated, the direction of the market today will be decided by how traders react to the major retracement zone at 1948.75 to 1933.00. Since this range is so wide, traders may even decide to stay inside it for the entire session especially since the trading action was so volatile this week.