E-mini S&P 500 Index (ES) Futures Technical Analysis – Strengthens Over 3042.75, Weakens Under 3022.75; Vulnerable to Closing Price Reversal Top

December E-mini S&P 500 Index futures are expected to open lower on Tuesday based on the early session trade. On Monday the market surged to an all-time high, but disappointing earnings from Google after the close encouraged long traders to take profits.

Investors are also trimming positions ahead of Wednesday’s U.S. Federal Reserve interest rate and monetary policy decisions. Traders expect the Fed to cut its benchmark rate 25-basis points, skip a December cut, and trim again in March 2020.

At 12:57 GMT, December E-mini S&P 500 Index futures are at 3034.75, down 1.50 or -0.05%.

Daily Technical Analysis

The main trend is up according to the daily swing chart. A trade through 3042.75 will signal a resumption of the uptrend. The main trend will change to down on a move through 2881.75.

The minor trend is also up. A trade through 2982.00 will change the minor trend to down. This is followed closely by another minor bottom at 2975.00.

There is no resistance on the chart, other than yesterday’s high at 3042.75. If another analyst says there is then he’s making it up. We can have upside targets by we can’t have resistance at all-time highs. How could we? The market has never been here before.

Without resistance, traders are going to have to rely on chart patterns. The pattern we are watching for is a closing price reversal top. In order for this pattern to form, we’re going to have to see a trade through 3042.75 then a lower close. If formed and confirmed then we could see the start of a 2 to 3 correction.

Daily Technical Forecast

Today’s inside move suggests investor indecision and impending volatility. If traders can’t take out 3042.75 then the direction of the index on Tuesday is likely to be determined by trader reaction to the previous all-time high at 3032.25.

Bullish Scenario

A sustained move over 3032.25 will indicate the presence of buyers. If this generates enough upside momentum then look for a test of 3042.75. Taking out this level could trigger an acceleration to the upside.

Bearish Scenario

A sustained move under 3032.25 will signal that the selling is greater than the buying at current price levels. If this move is able to generate enough downside momentum then look for the selling to possibly extend into the nearest uptrending Gann angle at 2999.00.