E-mini S&P 500 Index (ES) Futures Technical Analysis – Surge Over 3508.50 Will Target 3541.00 – 3576.25

December E-mini S&P 500 Index futures are trading sharply higher shortly after the opening on Thursday on bets that a potential gridlock in Washington could reduce the chance of major policy changes that would hurt corporate America, although concerns remained about the risk of a contested election.

At 14:36 GMT, the benchmark index is at 3494.50, up 59.50 or +1.73%.

Shares of technology mega-caps including Apple Inc, Amazon.com Inc and Alphabet Corp rose more than 2% each in early premarket trading, building on a rally of more than 4% on Wednesday.

Energy stocks such as Exxon Mobil and Chevron slipped 0.3% and 0.9%, respectively, tracking oil prices.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. Momentum also shifted to the upside. A trade through 3541.00 will reaffirm the uptrend, while a move through 3225.00 will change the main trend to down.

The minor trend is also up. The minor trend changed to up on Wednesday when buyers took out the last minor top at 3462.50. This shifted momentum to the upside.

The main range is 2916.50 to 3576.25. Its retracement zone at 3246.25 to 3168.50 is support. This area stopped the selling at 3225.00 on October 30.

The minor range is 3541.00 to 3225.00. Its retracement zone is 3383.00 to 3420.25. The market is currently trading on the bullish side of this zone, making it support.

Daily Swing Chart Technical Forecast

We’re in a momentum driven market. The upside momentum should continue as long as the index remains above the minor retracement zone at 3420.25 to 3383.00.

Bullish Scenario

The next upside target is the minor top at 3508.50. Taking out this level will indicate the buying is getting stronger. This could extend the rally into a pair of main tops at 3541.00 and 3576.25.

Bearish Scenario

The first sign of weakness or selling pressure will be a break under the minor Fibonacci level at 3420.25. This could lead to a break into 3383.00. This is a potential trigger point for an acceleration to the downside.