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James Hyerczyk
E-mini S&P 500 Index

December E-mini S&P 500 Index futures are trading flat to lower on Wednesday, pressured by several factors including concerns over Brexit as U.K. and EU negotiators try to hammer out an acceptable alternative to a hard exit, renewed worries over U.S.-China trade relations and weaker than expected U.S. economic data. The potentially bearish events are helping to dampen yesterday’s earnings driven performance.

At 15:02 GMT, December E-mini S&P 500 Index futures are trading 2996.50, down 1.25 or -0.05%.

As far as U.S.-China trade relations are concerned, early Wednesday, China threatened countermeasures if the U.S. continues to “meddle” in its affairs over Hong Kong. President Trump has been noticeably silent on the matter, perhaps fearing he’ll offend the Chinese, causing the trade deal to fall apart.

Additionally, the Wall Street Journal questioned how much more in U.S. agricultural products China will actually buy and for how long.

Finally, keeping a lid on prices was a U.S. retail sales report that came in lower than expected, increasing the chances of an October 30 Federal Reserve rate cut.

Daily December E-mini S&P 500 Index

Daily Technical Analysis

The main trend is up according to the daily swing chart. A trade through 3003.25 will signal a resumption of the uptrend.

On the downside, support comes in at 2960.50 to 2940.25.


Daily Technical Forecast

Based on the early price action, the direction of the December E-mini S&P 500 Index the rest of the session on Wednesday is likely to be determined by trader reaction to a Gann angle cluster at 2999.00 to 3002.75.

Bearish Scenario

A sustained move under 2999.00 will indicate the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into the downtrending Gann angle at 2979.75. This is a potential trigger point for an acceleration into the Fibonacci level at 2960.50.

Bullish Scenario

Overtaking and sustaining a rally over 3002.75 will signal the presence of buyers. Taking out yesterday’s high could trigger an acceleration to the upside with the main top at 3025.75 the next potential upside target.

Side Notes

I think the low volume is being caused by the lack of clarity for investors. Brexit, U.S.-China trade relations, U.S. economic data, and Fed rate cut decision may be too much for investors at this time, leading professional investors to head to the sidelines.

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