E-mini S&P 500 Index (ES) Futures Technical Analysis – Strengthens Over 3308.75, Weakens Under 3291.25

December E-mini S&P 500 Index futures are trading lower shortly before the cash market on Friday with investors flocking to the perceived safety of the U.S. Dollar, Japanese Yen and Treasury bonds after U.S. President Donald Trump tested positive for COVID-19.

Investors reacted in textbook fashion to the news by selling because of the uncertainty the event created. Now the game begins because investors have become accustomed to buying weakness. They tend to bet on stocks that will benefit from further restrictions in the economy, while selling those that will benefit from a recovery.

Trump’s positive test brings COVID-19 back to the forefront, which means fear of renewed restrictions and a slowdown of the economic recovery.

At 12:27 GMT, December E-mini S&P 500 Index futures are trading 3324.25, down 43.50 or -1.29%.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, but momentum is trending higher. A trade through 3198.00 will signal a resumption of the downtrend. A move through 3419.50 will change the main trend to up.

The minor trend is up. This is controlling the momentum. A trade through the new minor top at 3388.00 will indicate the buying is getting stronger. A move through 3291.25 will change the minor trend to down.

The short-term range is 3576.25 to 3198.00. Its retracement zone at 3387.25 to 3431.75 is resistance. This zone stopped the rally at 3388.00 on Thursday.

The minor 50% support is 3308.75 and 3293.00. These levels are underpinning the market early Friday.

The main support zone is 3246.25 to 3168.50.

Daily Swing Chart Technical Forecast

Based on the early price action, the direction of the December E-mini S&P 500 on Friday is likely to be determined by trader reaction to the minor 50% levels 3308.75 and 3293.00.

Bullish Scenario

A sustained move over 3308.75 will indicate the presence of buyers. If this can generate enough upside momentum then look for a rally into the resistance cluster at 3387.25 to 3388.00. The latter is also a trigger point for an acceleration to the upside.

Bearish Scenario

A failure to hold 3308.75 will be the first sign of weakness. This should lead to a test of 3293.00 and the minor bottom at 3291.25.

Look for an acceleration into 3246.25 if 3291.25 fails as support.

For a look at all of today’s economic events, check out our economic calendar.