E-mini S&P 500 Index (ES) Futures Technical Analysis – Strengthens Over 3713.00, Weakens Under 3684.50

March E-mini S&P 500 Index futures are trading higher late Tuesday after the cash market close. The price action suggests bargain hunters came in after Monday’s plunge. Traders should little concern for the outcome of the Senate runoff elections in the battleground state of Georgia, which will determine the balance of power in Washington.

At 21:25 GMT, March E-mini S&P 500 Index futures are at 3715.75, up 23.50 or +0.64%.

The latest polls from data website FiveThirtyEight gave a slight edge to the two Democratic challengers who need to win both races for Democrats to gain U.S. Senate control from Republicans.

Along with their narrow majority in the House of Representatives, a “blue sweep” of Congress could usher in larger fiscal stimulus. It could also pave the way for President-elect Joe Biden to push through greater corporate regulation and higher taxes.

In other news, the CBOE Volatility Index flip-flopped after closing at its highest level in two months on Monday, which saw Wall Street’s main indexes drop to two-week lows as investors booked profits at the start of the year.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 3773.25 will negate yesterday’s closing price reversal top and signal a resumption of the uptrend. The main trend will change to down on a move through the last swing bottom at 3596.00.

A trade through 3652.50 will confirm the closing price reversal top. This will shift momentum to the downside and trigger the start of a 2 to 3 day correction.

The minor range is 3773.25 to 3652.50. Its 50% level at 3713.00 is currently being straddled.

The short-term range is 3596.00 to 3773.25. Its 50% level at 3684.50 provided support earlier today.

The intermediate range is 3497.25 to 3773.25. Its 50% level at 3635.25 was tested successfully on Monday.

Short-Term Outlook

Tuesday’s price action suggests the pair of 50% levels at 3684.50 and 3713.00 is controlling the short-term direction of the index.

Look for an upside bias to develop on a sustained move over 3713.00 and for a downside bias to develop on a sustained move under 3684.50.