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E-mini S&P 500 Index (ES) Futures Technical Analysis – Trader Reaction to 3431.75 Sets the Tone into Close

By:
James Hyerczyk
Published: Oct 22, 2020, 17:41 UTC

The direction of the December E-mini S&P 500 Index into the close will likely be determined by trader reaction to the Fibonacci level at 3431.75.

E-mini S&P 500 Index

In this article:

December E-mini S&P 500 Index futures are trading higher at the mid-session on Thursday after reversing earlier losses. Some investors, holding out for more fiscal stimulus, are helping to support the benchmark index. Earlier in the session, the index was pressured by an economic report pointing to a slowing labor market recovery.

At 17:21 GMT, December E-mini S&P 500 Index futures are trading 3438.25, up 5.75 or +0.17%.

Helping to underpin the index were comments from House Speaker Nancy Pelosi who said negotiators were making progress in ongoing talks with the Trump administration for another round of financial aid.

Earlier in the session, six of the 11 major S&P sectors declined, and tech and consumer discretionary stocks fell about 1% each.

S&P component Coca-Cola gained 1.7% as it beat quarterly results expectations, while chemicals maker Dow Inc fell 1.5% even as it surpassed quarterly profit estimates.

Daily December 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. The main trend will change to down on a trade through the nearest main bottom at 3198.00. A move through 3541.00 will signal a resumption of the uptrend.

The minor trend is down. A trade through 3508.50 will change the minor trend to up. This will shift momentum to the upside.

The intermediate-term range is 3576.25 to 3198.00. The index is currently testing its retracement zone at 3387.00 to 3431.75. This zone is controlling the near-term direction of the index.

The short-term range is 3198.00 to 3541.00. If the selling pressure continues then look for the move to possibly extend into its retracement zone at 3369.50 to 3329.00.

The new minor range is 3541.00 to 3402.50. Its 50% level at 3471.75 is the next upside target.

Short-Term Outlook

The direction of the December E-mini S&P 500 Index into the close will likely be determined by trader reaction to the Fibonacci level at 3431.75.

Bullish Scenario

A sustained move over 3431.75 will indicate the presence of buyers. This could drive the index into the 50% level at 3471.75 into the close. Overtaking this level could lead to a test of the minor top at 3508.50.

Bearish Scenario

A sustained move under 3431.75 will signal the presence of sellers. This could lead to a retest of the intraday low at 3402.50, followed by a pair of 50% levels at 3387.00 and 3369.50.

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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