E-mini S&P 500 Index (ES) Futures Technical Analysis – October 8, 2014, Forecast

On Tuesday, December E-mini S&P 500 Index futures closed sharply lower and in a position to challenge the last main bottom at 1918.25. Taking out this level will reaffirm the downtrend on the daily chart.

The first support area to watch for possible bottoming action is a cluster of short-term angles and a long-term angle ranging from 1926.25 to 1922.25. This area was tested successfully on Tuesday, but there was no technical bounce. This was because the downside momentum was too strong. If there is no follow-through selling pressure early today then traders may recognize this area as support.

If traders take out 1918.25 with conviction then look for a possible acceleration to the downside with the long-term angle at 1903.75 the next likely target. This is the last major support before the August 8 main bottom at 1882.75.

If enough buyers come in to hold support at 1918.25 then look for a labored rally because the index will have to overcome a number of price levels before accelerating to the upside.

The first level of support is the cluster at 1922.25 to 1926.75. If this area holds then buyers will try to cross over to the bullish side of a major Fibonacci level at 1932.75, followed by an uptrending angle at 1934.25.

Over this level, the next resistance is a short-term pivot zone at 1938.50 to 1944.75 then the major 50% level at 1948.25.

The tone of the session will be determined by trader reaction to 1918.25. Traders may straddle this level several times before finally deciding whether to take the market higher or lower today.