E-mini S&P 500 Index (ES) Futures Technical Analysis – Trader Reaction to 3387.25 Sets the Tone

December E-mini S&P 500 Index futures are trading higher shortly after the cash market opening on Wednesday after President Donald Trump’s abrupt call to end stimulus talks sent Wall Street tumbling in the previous session.

Trump broke off negotiations with Democrats on more economic aid in a tweet on Tuesday, and promised a major stimulus bill after he wins the November 3 election. The announcement sparked the worst session for the benchmark S&P 500 Index in two weeks, while airlines sank 3% as the more appeared to scuttle $25 billion in new bailout for the industry.

At 13:59 GMT, December E-mini S&P 500 Index futures are trading 3390.75, up 37.50 or +1.12%.

Trump later urged Congress to immediately approve the package. Shares of Delta Air Lines Inc, American Airlines Group Inc, United Airlines Holdings Inc and JetBlue Airways Corp jumped between 2.4% and 6.9% in premarket trading.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The trend turned up on Wednesday when buyers took out the previous main top at 3419.50. A trade through 3198.00 will change the main trend to down.

The minor trend is also up. A move through 3300.25 will change the minor trend to down. A trade through 3291.25 will reaffirm the downtrend.

The biggest concern for traders should be yesterday’s closing price reversal top. A move through 3421.75 will negate the potentially bearish chart pattern, while a trade through 3330.50 will confirm the chart pattern and could lead to a 2 to 3 day counter-trend correction.

The short-term range is 3576.25 to 3198.00. Its retracement zone at 3387.25 to 3431.75 is potential resistance. This area stopped the rally on Tuesday at 3421.75.

The minor range is 3198.00 to 3421.75. Its retracement zone at 3309.75 to 3383.50 is the next potential downside target.

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 short-term 50% level at 3387.25.

Bullish Scenario

A sustained move over 3387.25 will indicate the presence of buyers. This could create the upside momentum needed to challenge 3421.75 to 3431.75.

Bearish Scenario

A sustained move under 3387.25 will signal the presence of sellers. If this move can generate enough downside momentum then look for a possible drive into 3309.75 to 3283.50.