E-mini S&P 500 Index (ES) Futures Technical Analysis – Pivot at 2659.75 Controlling Price Action

The benchmark U.S. stock index is trading lower early Monday after erasing earlier gains. The market is trading inside Friday’s range which suggests investor indecision and impending volatility.

At 0218 GMT, the December E-mini S&P 500 Index is trading 2666.50, down 3.00 or -0.11%.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 2627.25 will signal a resumption of the downtrend with the next target the May 3 bottom at 2627.25, followed by the April 2 bottom at 2562.50.

The market is in no position to turn the main trend to up with the nearest main top coming in at 2824.25, but today’s session begins with the index inside the window of time for a closing price reversal bottom. This chart pattern could trigger the start of a counter-trend short-covering rally.

The main range is 2562.50 to 2947.00. Its retracement zone at 2701.75 to 2748.50 is controlling the near-term direction of the index. It starts the session as resistance.

The short-term range is 2824.25 to 2627.25. Its 50% level or pivot at 2725.75 falls inside the main retracement zone at 2725.75.

Daily Swing Chart Technical Forecast

Given the early inside move, it looks as if investors haven’t made up their mind yet on the direction of the index. Friday’s range was 2692.25 to 2627.25, its 50% level or pivot is 2659.75. Trader reaction to this pivot will likely determine the direction of the index today.

Bullish Scenario

A sustained move over the pivot at 2659.75 will indicate the presence of buyers. If this generates enough upside momentum to take out 2692.25 then look for the rally to possibly extend into the main Fibonacci level at 2701.75, followed by the short-term 50% level at 2725.75.

Bearish Scenario

A sustained move under 2659.75 will signal the presence of sellers. If this move creates enough downside momentum then look for the selling to extend into last week’s low at 2627.25 then 2602.75, followed by 2562.50.