E-mini S&P 500 Index (ES) Futures Technical Analysis – Trader Reaction to 3230.75 Sets the Tone

September E-mini S&P 500 Index futures are trading slightly lower shortly before the cash market opening on Wednesday after clawing back most of its earlier losses.

The index was under pressure throughout the pre-market session as investors shunned risky assets after Washington ordered a shutdown of the Chinese consulate in Houston, escalating tensions between the world’s two largest economies. In response, China is considering the closure of U.S. consulate in Wuhan, a person with direct knowledge of the matter said.

At 12:54 GMT, September E-mini S&P 500 Index futures are trading 3246.25, down 5.00 or -0.15%.

Before the opening, Biogen shares rose after the drugmaker reported quarterly earnings of $10.26 per share, compared to a consensus estimate of $8.03 a share.

Shares of Pfizer rose more than 3% after the company and the government struck a deal in which the company would provide 100 million doses of a COVID-19 vaccine being developed with partner BioNTech, with an option for the government to acquire an additional 500 million doses. The vaccine would be free for Americans.

Meanwhile, UBS downgraded Macy’s and Kohl’s to “sell” from “neutral,” saying brands can no longer depend on malls or department stores to drive customer traffic.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 3273.25 will signal a resumption of the uptrend. The main trend will change to down on a move through 3105.25.

The minor trend is also up. A new minor top was formed at 3273.25. A trade through 3188.50 will change the minor trend to down. This will also shift momentum to the downside.

The minor range is 3188.50 to 3273.25. Its 50% level at 3230.75 is support.

The second minor range is 3105.25 to 3273.25. Its retracement zone at 3189.25 to 3169.50 is another potential support area.

Daily Swing Chart Technical Forecast

Based on the early price action, the direction of the September E-mini S&P 500 Index the rest of the session on Wednesday is likely to be determined by trader reaction to the first 50% level at 3230.75.

Bullish Scenario

A sustained move over 3230.75 will indicate the presence of buyers. This could lead to a test of 3273.25. This price is a potential trigger point for an acceleration to the upside with the next major target the February 20 main top at 3396.50.

Bearish Scenario

A sustained move under 3230.75 will signal the presence of sellers. This could trigger an acceleration into the minor bottom at 3188.50, followed by a minor retracement zone at 3189.25 to 3169.50.

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