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E-mini S&P 500 Index (ES) Futures Technical Analysis – Testing Short-Term Zone at 4604.50 – 4576.50

By:
James Hyerczyk
Updated: Dec 14, 2021, 18:15 UTC

The direction of the March E-mini S&P 500 Index into the close is likely to be determined by trader reaction to 4604.50.

E-mini S&P 500 Index

In this article:

March E-mini S&P 500 Index futures are down more than 1% at the mid-session on Tuesday after government data showed producer prices increased more than expected in November.

The report likely solidified the chances of a faster tapering from the U.S. Federal Reserve and a sooner-than-previously-anticipated rate hike. Meanwhile, the fast-spreading Omicron coronavirus variant also dampened investor sentiment after the benchmark index hit an all-time closing high late last week.

At 17:54 GMT, March E-mini S&P 500 Index futures are trading 4598.75, down 60.75 or -1.30%. The S&P 500 Trust ETF (SPY) is at 460.63, down $5.94 or -1.27%.

Data from the Labor Department showed the producer price index (PPI) for final demand in the 12 months through November shot up 9.6%, clocking its largest gain since November 2010 and followed an 8.8% increase in October.

Nine of the 11 major S&P 500 sector indexes fell, with financials gaining 0.5%, as investors expected a hawkish tone from the Fed at the end of its two-day meeting on Wednesday.

Daily March E-mini S&P 500 Index

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, momentum is trending lower following the confirmation of yesterday’s closing price reversal top.

A trade through 4723.25 will negate the closing price reversal bottom and signal a resumption of the uptrend. A move through 4485.75 will change the main trend to down.

The minor trend is also down. This confirms the shift in momentum.

The short-term range is 4485.75 to 4723.25. Its retracement zone at 4604.50 – 4576.50 is currently being tested. Since the main trend is up, buyers could come in on a test of this area.

The main range is 4252.75 to 4735.00. Its retracement zone at 4493.75 to 4437.00 is support. This zone stopped the selling at 4485.75 on December 3.

Daily Swing Chart Technical Forecast

The direction of the March E-mini S&P 500 Index into the close is likely to be determined by trader reaction to 4604.50.

Bearish Scenario

A sustained move under 4604.50 will indicate the presence of sellers. The next target is 4576.50.

Buyers could come in on the first test of 4604.50 – 4576.50. They are going to try to form a secondary higher bottom. If 4576.50 fails, however, we could see an acceleration to the downside with the next major target a retracement zone at 4493.75 to 4437.00. Inside this area is a main bottom at 4485.75.

Bullish Scenario

A sustained move over 4604.50 will signal the presence of buyers. If the current intraday low at 4596.25 holds as support then look for a retracement into 4659.75.

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

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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