E-mini S&P 500 Index (ES) Futures Technical Analysis – Trader Reaction 2949.50 Determines Direction

March E-mini S&P 500 Index futures are expected to open lower after posting a volatile two-sided trade during the pre-market session following last week’s steep decline amid fears of the coronavirus outbreak.

The index traded lower shortly after the early session opening but then rebounded to turn higher as investor pinned their hopes on an earlier than expected rate cut by the Federal Reserve at its regularly scheduled policy meeting on March 17-18. There is even increasing chatter in the marketplace of an unscheduled, coordinated global interest rate cut by the top central banks.

At 13:50 GMT, March E-mini S&P 500 Index futures are trading 2937.50, down 13.50 or -0.46%.

Another wave of volatility could hit the markets around 14:45 GMT to 15:00 GMT when the U.S. releases a slew of economic reports including ISM Manufacturing PMI.

Daily Technical Analysis

The main trend is down according to the daily swing chart. A trade through 2853.25 will signal a resumption of the downtrend.

The minor trend is also down, but today’s higher-higher, higher-low chart pattern made 2853.25 a new minor bottom.

The major support zone is 2876.75 to 2753.75. Friday’s low at 2853.25 was formed inside this zone. It is controlling the longer-term direction of the index.

The new minor range is 3397.50 to 2853.25. Its retracement zone at 3125.50 to 3189.75 is the primary upside target.

Daily Technical Forecast

Based on the early price action and the current price at 2937.50, the direction of the March E-mini S&P 500 Index on Monday is likely to be determined by trader reaction to the price cluster at 2949.50.

Bullish Scenario

A sustained move over 2949.50 will indicate the presence of buyers. If this move can create enough upside momentum then there is room to rally all the way up to the short-term 50% level at 3125.50. This is followed by a downtrending angle at 3173.50 and the short-term Fibonacci level at 3189.50.

Bearish Scenario

A sustained move under 2949.50 will signal the presence of sellers. The first downside target is 2876.75, followed closely by Friday’s low at 2853.25.

If 2853.25 is taken out, the market could accelerate toward the main Fibonacci level at 2753.75.