E-mini S&P 500 Index (ES) Futures Technical Analysis – Strengthens Over 2932.50, Weakens Under 2920.25

September E-mini S&P 500 Index futures are trading higher at the mid-session as global bond yields firmed while investors reacted positively to better-than-expected trade data out of China. Thursday’s sharp gains have put the index in a position to erase all of this week’s earlier losses and possibly turn higher for the period. It all depends on how investors react to a short-term retracement zone that is currently being tested.

At 16:49 GMT, September E-mini S&P 500 Index futures are at 2928.25, up 47.75 or +1.68%.

Daily Technical Analysis

The main trend is down according to the daily swing chart, however, momentum has been trending higher since the formation of the closing price reversal bottom on August 6 at 2775.75. A trade through 3029.50 will change the main trend to up, but buyers are going to have to take out a short-term retracement zone with conviction in order to make this more a reality.

A trade through 2775.75 will negate the closing price reversal bottom and signal a resumption of the downtrend.

The main range is 2732.25 to 3029.50. Its retracement zone at 2880.75 to 2845.75 is controlling the direction of the index. This zone is new support.

The short-term range is 3029.50 to 2775.75. Its retracement zone at 2902.50 to 2932.50 is the primary upside target. This zone is currently being tested.

Trader reaction to 2902.50 to 2932.50 will tell us if sellers are coming in to stop the rally in an effort to form a secondary lower top that could lead to another steep breakdown.

Overtaking 2932.50 with conviction will indicate the buying is stronger than the selling at current price levels. With conviction means after breaking out over 2932.50, buyers come in to defend this area or turn bid at this price. If it breaks back below then this will indicate the buying isn’t that strong.

Daily Technical Forecast

Based on the current price at 2928.25, the direction of the September E-mini S&P 500 Index into the close is likely to be determined by trader reaction to the Fibonacci level at 2932.50 and the uptrending Gann angle at 2920.25.

Bullish Scenario

Holding above 2920.25 will indicate the presence of buyers. Overtaking 2932.50 will indicate the buying is getting stronger. This could trigger an acceleration to the upside with the next target a downtrending Gann angle at 2957.50.

Look for sellers on the first test of 2957.50, but overcoming it could trigger another surge into the next downtrending Gann angle at 2993.50.

Bearish Scenario

The inability to takeout or sustain a rally over 2932.50 will signal the return of sellers. Crossing to the weak side of the uptrending Gann angle at 2920.25 will indicate the selling is getting stronger. This could trigger a break into the 50% level at 2902.50.

Look for a break into 2880.75 if 2902.50 fails. This is a potential trigger point for an acceleration into 2845.75.