E-mini S&P 500 Index (ES) Futures Technical Analysis – Trader Reaction to 2735.00 Will Determine Direction This Week

March E-mini S&P 500 Index futures surged to a record high, continuing the rally which began the week-ending August 25, 2017. Since that time, the index has averaged a gain of about 16 points per week.

Momentum is driving the index higher so when the buying momentum stops, the market will correct. There is no resistance so it’s going to be a chart pattern like a closing price reversal top that tells us when the correction is about to begin.

We also think investors should start preparing for increased volatility. Last year, volatility was nearly nonexistent, as indicated by the VIX index dropping to its lowest level ever.

The index settled the week at 2742.50, up 66.50 or +2.49%.

Weekly Technical Analysis

The main trend is up according to the weekly swing chart. After taking out last week’s high at 2743.25, the most important number the rest of the week will be last week’s close under 2742.50. A move under this level will put the index in a position to form a potentially bearish closing price reversal top. Holding above it will mean the buying is getting stronger.

The current main range is 2415.50 to 2747.75. Its retracement zone at 2581.50 to 2542.50 is the next potential downside target. This is just to show you how far a normal correction can take this market.

Weekly Technical Forecast

Based on last week’s close at 2742.50 and the current price action, the direction of the March E-mini S&P 500 Index this week is likely to be determined by trader reaction to the steep uptrending Gann angle at 2735.00.

A sustained move over 2735.00 will put the index in an extremely bullish position.

A sustained move under 2735.00 will indicate the presence of sellers. The daily chart is wide open to the downside with 2581.50 to 2542.50 the next major downside target.