E-mini S&P 500 Index (ES) Futures Technical Analysis – Testing Major RT Zone at 3246.25 to 3168.50

December E-mini S&P 500 Index futures are expected to open lower based on the premarket trade, weighed down by a sell-off in the technology sector of the broad-based index. The selling pressure is coming from underwhelming earnings reports as well as general uncertainty ahead of Tuesday presidential election and worries that rapidly rising coronavirus cases will have a negative impact on the global economic recovery.

At 13:23 GMT, December E-mini S&P 500 Index futures are trading 3276.00, down 26.25 or -0.79%.

Apple Inc is down 4% in trading before the opening bell after it posted the steepest drop in quarterly iPhone sales in two years due to the late launch of new 5G phones. Google parent Alphabet Inc, however, climbed 7% after it beat estimates for quarterly sales as businesses resumed advertising.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, momentum is trending lower. A trade through 3198.00 will change the main trend to down. A move through 3541.00 will signal a resumption of the uptrend.

This is highly unlikely but due to the prolonged move down in terms of price and time, the market begins today’s session inside the window of time for a potentially bullish closing price reversal bottom. This chart pattern won’t reaffirm the uptrend, but it could lead to a 2 to 3 day rally.

The minor trend is down. This is controlling the momentum. On Thursday, the market formed a closing price reversal bottom, but this chart pattern was negated earlier today. A trade through 3462.50 will change the minor trend to up. This will turn momentum higher.

The main range is 2916.50 to 3576.25. Its retracement zone at 3246.25 to 3168.50 is currently being tested. This zone is controlling the near-term direction of the index. Since the main trend is up, buyers appear to be coming in on a test of this zone.

The minor range is 3198.00 to 3541.00. Its 50% level at 3369.50 is a potential upside target.

Daily Swing Chart Technical Analysis

Based on the early price action, the direction of December E-mini S&P 500 Index on Friday is likely to be determined by trader reaction to yesterday’s close at 3302.25.

Bearish Scenario

A sustained move under 3302.25 will indicate the presence of sellers. Crossing to the weak side of the main 50% level at 3246.25 will indicate the selling is getting stronger. This could trigger a break through the intraday low at 3226.00.

If 3226.00 fails then look for the selling to possibly extend into the main bottom at 3198.00, followed by the main Fibonacci level at 3168.50.

Bullish Scenario

Holding above the 50% level at 3246.25 will indicate the selling is getting weaker. Overcoming and sustaining a rally over 3302.25 will signal the return of buyers. If this move creates enough upside momentum then look for the rally to possibly extend into the minor 50% level at 3369.50.