E-mini S&P 500 Index (ES) Futures Technical Analysis – Trader Reaction to 3486.25 Sets the Tone on Friday

December E-mini S&P 500 Index futures are trading lower shortly before the close on Thursday, but a late session rally has put the index in a position to turn higher after spending most of the session in negative territory.

The benchmark index opened lower as an unexpected rise in weekly jobless claims exacerbated fears of a stalling economic recovery, a day after Treasury Secretary Steven Mnuchin dashed hopes for more fiscal aid before the election.

At 20:03 GMT, December E-mini S&P 500 Index futures are trading 3477.00, down 4.00 or -0.11%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 3541.00 signals a resumption of the uptrend. The main trend changes to down on a trade through 3198.00. This is highly unlikely, but there is room for a normal 50% to 61.8% correction of the current rally.

The minor trend is also up. A trade through 3330.50 will change the minor trend to down. This will shift momentum to the downside.

The first short-term retracement zone target is 3431.75 to 3387.00. This zone is controlling the near-term direction of the index. On Thursday, the upper end of this zone provided the support.

The minor range is 3541.00 to 3431.50. Its 50% level at 3486.25 is a potential upside target.

Short-Term Outlook

Based on Thursday’s trade, the first level of support is the Fibonacci level at 3431.50. If this price fails as support then look for the selling to possibly extend into the 50% level at 3387.00.

On the upside, the key level to watch is 3486.25. Stopping at this level will indicate that sellers are trying to form a secondary lower top. Crossing to the strong side of this level will indicate the buying is getting stronger. If this generates enough upside momentum then look for the rally to possibly extend into the recent minor top at 3541.00.