E-mini S&P 500 Index (ES) Futures Technical Analysis – Slow Grind Higher Helping to Sustain Rally

It was a relatively volatile day on Wall Street on Friday with comment from Washington policymakers driving prices both down and up late in the session. Prices were strong from the opening as March E-mini S&P 500 Index futures scaled a new high on hopes of more stimulus from Washington.

But shortly after the mid-session, prices began to retreat and turned lower after comments from a senator dampened the possibility of new stimulus. However, the market turned around and hit a new high into the close after U.S. President-elect Joe Biden said his economic package will be in the trillions of dollars.

On Friday, March E-mini S&P 500 Index futures settled at 3817.50, up 22.00 or +0.58%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was reaffirmed early Friday when buyers took out the previous session high at 3804.00. The main trend will change to down when sellers take out the nearest swing bottom at 3596.00.

The minor trend is also up. It changes to down on a trade through 3652.50. This will also shift momentum to the downside.

The minor range is 3652.50 to 3817.75. Its 50% level at 3735.00 is the nearest support.

The short-term range is 3497.25 to 3817.75. Its 50% level at 3706.75 is additional support.

The main range is 3216.25 to 3817.75. If the main trend changes to down then look for the selling pressure to possibly extend into its retracement zone at 3517.00 to 3446.00.

Short-Term Outlook

Since there is no resistance, one of the best signs of a possible shift in momentum will be a closing price reversal top chart pattern. If confirmed it won’t change the trend, but it will signal that the selling is greater than the buying at current price levels.

While we don’t see a sharp break coming, we do think that any selling will be labored because of the series of 50% levels at 3735.00, 3706.00 and 3657.50.

The first trigger point for an acceleration to the downside is 3657.50. The second trigger point is 3596.00.

The price action was impressive last week. The slow grind higher suggests strong calculated buying rather than just investors chasing the market. Then type of price action tends prevent the market from overheating.

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