E-mini S&P 500 Index (ES) Futures Technical Analysis – Strengthens Over 4778.00, Weakens Under 4764.50

March E-mini S&P 500 Index futures are trading slightly lower shortly after the opening on Wednesday as the optimism with which the benchmark index started the year showed some signs of waning, following yesterday’s potentially bearish closing price reversal top. Meanwhile, volume is a little on the light side as investors waited for key Federal Reserve meeting minutes to be released.

At 14:48 GMT, March E-mini S&P 500 Index futures are trading 4774.00, down 10.25 or -0.21%. The S&P 500 Trust ETF (SPY) is at $476.64, down $0.91 or -0.19%.

In U.S. economic news, payroll processing firm ADP reported that private job growth totaled 807,000 for the month, well ahead of the Dow Jones estimate for 375,000 and the November gain of 505,000. The November total was revised lower from the initially reported 534,000.

Additionally, the minutes from the Fed’s December meeting, due to be published at 1900 GMT, could underscore U.S. policymakers’ newfound sensitivity to inflation and their readiness to act.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, momentum will shift to the downside if sellers take out yesterday’s low at 4764.50.

A trade through 4808.25 will negate Tuesday’s closing price reversal top and signal a resumption of the uptrend. The main trend will change to down on a move through 4747.50.

The minor range is 4747.50 to 4808.25. The index is currently straddling its 50% level at 4778.00.

The short-term range is 4520.25 to 4808.25. If the main trend changes to down then its retracement zone at 4664.25 to 4630.25 will become the primary downside target.

Daily Swing Chart Technical Forecast

The direction of the March E-mini S&P 500 Index into the close on Wednesday is likely to be determined by trader reaction to 4778.00.

Bullish Scenario

A sustained move over 4778.00 will indicate the presence of buyers. If this move creates enough upside momentum then look for a surge into 4808.25. Taking out this level will signal a resumption of the uptrend. It could trigger an acceleration to the upside.

Bearish Scenario

A sustained move under 4777.75 will signal the presence of sellers. Taking out 4764.50 will shift momentum to the downside. This could trigger a fast break into 4747.50.

Taking out 4747.50 will change the main trend to down. If the selling pressure is strong enough, this could trigger an acceleration into 4664.25 to 4630.25. Look for buyers to come in on a test of this area.