E-mini S&P 500 Index (ES) Futures Technical Analysis – Testing Major Retracement Zone at 2748.50 to 2701.65

A steep drop in shares of Apple is helping to drive the December E-mini S&P 500 Index futures contract sharply lower on Monday. A stronger U.S. Dollar and global trade tensions also weighed on prices. The weakness in Apple spread to other so-called FANG stocks with shares of Alphabet dropping 2.4 percent and Amazon falling 4.4 percent. Amazon is now down about 20 percent from its 52-week high, putting the stock in bear market territory.

At 1820 GMT, the December E-mini S&P 500 Index is trading 2735.25, down 43.75 or -1.57%.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. Today’s price action has formed a new main top at 2818.00. This forms a double-top with the 2824.25 main top. Taking out both of this tops will change the main trend to up. The main bottom is 2603.00. A trade through this level will reaffirm the downtrend.

A series of retracement levels are also controlling the price action.

The major retracement zone is 2748.50 to 2701.65. This zone is controlling the longer-term direction of the index. The market is currently testing this zone.

The main range is 2947.00 to 2603.00. Its retracement zone at 2775.00 to 2815.50 has provided resistance the last four sessions.

The short-term range is 2603.00 to 2818.00. Its retracement zone at 2710.50 to 2685.00 is the primary downside target. Inside this zone is the major Fibonacci level at 2701.65. Making this area the most important support on the chart.

Daily Swing Chart Technical Forecast

Based on the current price at 2735.25, the direction of the December E-mini S&P 500 Index into the close is likely to be determined by trader reaction to the major 50% level at 2748.50.

A sustained move under 2748.50 will indicate the selling is getting stronger. This could trigger an acceleration into the series of retracement levels at 2710.50, 2701.65 and 2685.00. This area has to hold or we could see an acceleration to the downside since the next major target comes in at 2603.00.

Overtaking 2748.50 will signal the return of buyers. If this move creates enough upside momentum then look for a potential surge into 2775.00. The index will strengthen if buyers can overcome this level.

Basically, watch the price action and read the order flow at 2748.50 the rest of the session. Trader reaction to this level will tell us if the buyers or sellers are in control.