E-mini S&P 500 Index (ES) Futures Technical Analysis – Reaction to 4775.00 Pivot Sets the Tone

March E-mini S&P 500 Index futures are nearing a record high on Monday as Wall Street looked to extend a recovery from the pandemic shock into the new year. The benchmark is being led higher in the premarket session by shares of oil majors Chevron Corp and Exxon Mobil Corp, which are up over 1% each as crude prices rose on tight supply and hopes of a further demand recovery in 2022.

At 13:52 GMT, March E-mini S&P 500 Index futures are trading 4783.75, up 25.25 or +0.53%. On Friday, the S&P 500 Trust ETF (SPY) settled at $474.89, down $1.27 or -0.27%.

In economic news, the IHS Markit’s flash manufacturing PMI data, due at 14:45 GMT, will be looked at for the impact of the surge in COVID-19 cases on manufacturing activity after it slowed to a one-year low in its last reading.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, but momentum is drifting lower following the formation of a closing price reversal top on December 30.

A trade through 4799.75 will negate the closing price reversal top and signal a resumption of the uptrend. A move through 4520.25 will change the main trend to down.

The chart pattern doesn’t change the main trend to down, but it could trigger a near-term correction with the retracement zone at 4660.00 to 4627.00 the next major downside target and value area.

The minor trend is down. This confirms the shift in momentum. A trade through the minor bottom at 4750.50 will indicate the selling pressure is getting stronger.

The minor range is 4799.75 to 4750.50. The index is currently straddling its pivot at 4775.00.

Daily Swing Chart Technical Forecast

The direction of the March E-mini S&P 500 Index on Monday is likely to be determined by trader reaction to the 50% level at 4775.00.

Bullish Scenario

A sustained move over 4775.25 will indicate the presence of buyers. If this move creates enough upside momentum then look for a test of 4799.75. Taking out this level will reaffirm the uptrend and could trigger an acceleration to the upside since there is no resistance at an all-time high.

Bearish Scenario

A sustained move under 4775.00 will signal the presence of sellers. If this generates enough downside momentum then look for the selling to possibly extend into the minor bottom at 4750.50.

Taking out 4750.50 could trigger an acceleration to the downside. The daily chart indicates there is no major support until 4660.00 to 4627.00.