E-mini S&P 500 Index (ES) Futures Technical Analysis – Reaction to 3587.25 Sets Tone into Friday’s Close

December E-mini S&P 500 Index futures are trading higher shortly before the cash market close on Wednesday as tech shares recovered some of their losses from earlier in the week at the expense of names who would benefit from an economic recovery.

Wednesday’s moves came after strong back-to-back strong sessions for the Dow that were sparked by Pfizer and BioNTech’s announcement about their more than 90% effective COVID-19 vaccine.

At 20:56 GMT, December E-mini S&P 500 Index futures are trading 3566.75, up 25.75 or +0.73%.

The best-performing sectors this week, energy and financials, lagged. Energy was down more than 1%, while financials lost 0.8%. Energy remained up more than 15% week to date despite Wednesday’s decline; financials remain 8% higher over that time period.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 3668.00 will signal a resumption of the uptrend. The main trend changes to down on a move through the nearest main bottom at 3225.00.

The minor trend is also up. A trade through 3506.50 will change the minor trend to down. This will shift momentum to the downside.

The minor range is 3668.00 to 3506.50. Its 50% level or pivot at 3587.25 is the next upside target. This level is likely to control the direction of the index into Friday’s close.

The short-term range is 3225.00 to 3668.00. If the momentum shifts to the downside then look for the selling to possibly extend into its retracement zone at 3446.50 to 3394.25.

Short-Term Outlook

Once again, the next major move comes down to whether investors would be willing to buy strength or value.

Buying strength would entail playing for an acceleration to the upside on a move through the minor pivot at 3587.25. This would likely be a headline driven move.

Looking for a value play would mean waiting for a pullback into the short-term retracement zone at 3446.50 to 3394.25.

Either way, our bias remains to the upside.

For a look at all of today’s economic events, check out our economic calendar.