E-mini S&P 500 Index (ES) Futures Technical Analysis – Struggling with 4399.75 – 4432.75 Retracement Zone

December E-mini S&P 500 Index futures finished lower on Friday after a government report showed weaker jobs growth than expected in September, yet investors still expected the Federal Reserve to begin tapering assets purchases this year.

On Friday, December E-mini S&P 500 Index futures settled at 4382.25, down 7.75 or -0.18%.

The U.S. Labor Department’s Non-Farm Payrolls report showed the U.S. economy in September created the fewest jobs in nine months as hiring dropped at schools and some businesses were short of workers.

The Unemployment Rate fell to 4.8% from 5.2% in August and Average Hourly Earnings rose 0.6%, which was more than expected.

The fact that the number of new jobs was modest could temper expectations for a swift acceleration in economic growth following an apparent sharp slowdown in the third quarter, but is unlikely to stop the Federal Reserve from starting the process of reducing its monthly bond purchases as soon as November, analysts said.

In stock related news, the S&P 500 Energy Sector Index jumped 3.1%, with oil up more than 4% on the week as a global energy crunch has boosted prices to their highest since 2014.

Chevron and Exxon Mobil rallied more than 2% and were among the companies giving the S&P 500 the greatest lift.

Daily Swing Chart 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 October 1.

A trade through 4472.00 will change the main trend to up. A move through 4260.00 will negate the closing price reversal bottom and signal a resumption of the downtrend.

The main range is 4117.00 to 4539.50. Its retracement zone at 4328.25 to 4278.50 is support.

The short-term range is 4539.50 to 4260.00. The index closed under its retracement zone at 4399.75 to 4432.75, making it resistance. This zone stopped the buying on Thursday and Friday.

The minor range is 4472.00 to 4260.00. Its 50% level or pivot at 4366.00 is the nearest support.

Daily Swing Chart Technical Forecast

The direction of the December E-mini S&P 500 Index early Monday is likely to be determined by trader reaction to 4399.75.

Bullish Scenario

A sustained move over 4399.75 will indicate the presence of buyers. If this move creates enough upside momentum then look for a surge into 4421.50, followed by 4432.75.

Taking out 4432.75 will indicate the buying is getting stronger. This could trigger a breakout into the main top at 4472.00. This is another trigger point for an acceleration to the upside.

Bearish Scenario

A sustained move under 4399.75 will signal the presence of sellers. The first downside target is the pivot at 4366.00. If this level fails as support then we could see a retest of the major retracement zone at 4328.25 to 4278.50.