E-mini S&P 500 Index (ES) Futures Technical Analysis – Test of 3759.25 – 3783.75 Completes First Objective

March E-mini S&P 500 Index futures are trading higher shortly after the cash market close on Monday, driven by gains in technology shares after last week’s steep market sell-off, while mining shares rose as the retail trading frenzy shifted to silver.

The S&P 500 technology sector gave the S&P 500 its biggest boost in the broad rally. Microsoft and Apple were among the biggest positive influences.

At 21:11 GMT, March E-mini S&P 500 Index futures are at 3760.00, up 54.75 or +1.48%.

In economic news, the latest ISM survey was mixed as U.S. manufacturing activity slowed slightly in January, while a measure of prices paid by factories for raw materials and other inputs jumped to its highest level in nearly 10-years.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 3862.25 will change the main trend to up, while a move through Monday’s low at 3656.50 will signal a resumption of the downtrend.

The main retracement zone support is 3679.75 to 3636.75. This zone stopped the selling at 3656.50 on Monday.

The intermediate range is 3596.00 to 3862.25. Its 50% to 61.8% zone at 3729.00 to 3697.75 is potential support.

The short-term range is 3862.25 to 3656.50. Its retracement zone at 3759.25 to 3783.75 is the primary upside target of the recent sell-off. This zone stopped the buying at 3777.00 on Monday.

Short-Term Outlook

The direction of the March E-mini S&P 500 Index into the close on Monday will be determined by trader reaction to the short-term 50% level at 3759.25.

Bearish Scenario

A sustained move under 3759.25 will signal the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into a series of retracement levels at 3729.00, 3697.75 and 3679.75.

Bullish Scenario

A sustained move over 3759.25 will indicate the presence of buyers. This could trigger a further rally into the short-term Fibonacci level at 3783.75. This is a potential trigger point for an acceleration to the upside.

Side Notes

Monday’s retracement into 3759.25 to 3783.75 was a normal move. Trader reaction to this zone is what is going to determine the next major move.

The main trend is down so sellers came in following a test of this area. They are going to try to form a potentially bearish secondary lower top.

Bullish counter-trend buyers are going to try to overtake this zone, hoping to trigger an acceleration to the upside.

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