E-mini S&P 500 Index (ES) Futures Technical Analysis – Strengthens Over 2677.75, Weakens Under 2636.00

The bench mark futures index closed higher on Friday, but marginally lower for the week. Helping to keep a lid on prices were concerns over a global economic slowdown after the International Monetary Fund (IMF) issued a forecast calling for slower growth in 2019 and 2020. Uncertainty over U.S.-China trade relations also weighed on investor sentiment. Prices were supported by the announcement of the end of the 35 day government shutdown and a report which suggested a more dovish policy by the U.S. Federal Reserve.

On Friday, March E-mini S&P 500 Index futures settled at 2663.50, up 29.50 or +1.11%. For the week, the index was down 8.00 or -0.30%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 2677.75 will reaffirm the uptrend. This could lead to a quick test of the next main top at 2690.50. Taking out this top with conviction could put the index on course for an eventual move into the next main top at 2819.00.

The minor trend is also up. A trade through 2612.50 will change the main trend to down. This will also shift momentum to the downside.

The major retracement zone at 2636.00 to 2711.50 is controlling the longer-term direction of the index.

The short-term range is 2438.50 to 2677.75. Its retracement zone at 2558.00 to 2530.00 is support.

Daily Swing Chart Technical Forecast

Based on Friday’s price action and the close at 2636.00, the direction of the March E-mini S&P 500 Index on Monday is likely to be determined by trader reaction to the main 50% level at 2636.00.

Bullish Scenario

A sustained move over 2636.00 will indicate the presence of buyers. If this creates enough upside momentum then look for the rally to drive the index through the main tops at 2677.75 and 2690.50.

Look for a technical bounce on the first test of the Fib level at 2711.50, but be prepared for a breakout to the upside if buyers can take out this level with conviction.

Bearish Scenario

A sustained move under 2636.00 will signal the presence of sellers. This could trigger a labored break because of the series of minor bottoms at 2612.50, 2596.50, 2567.25 and 2560.25. The initial target of the sellers will be the retracement zone at 2558.00 to 2530.00.