E-mini S&P 500 Index (ES) Futures Technical Analysis – Trader Reaction to 3502.75 Sets the Tone

December E-mini S&P 500 Index futures are trading mostly flat shortly before the cash market opening on Wednesday as investors express doubts over more fiscal stimulus following an impasse in Washington and ahead of the next batch of quarterly bank earnings after JPMorgan kicked off the season on an upbeat note on Tuesday.

At 12:12 GMT, December E-mini S&P 500 Index futures are at 3503.25, down 1.50 or -0.04%.

Goldman Sachs Group Inc, Wells Fargo & Co and Bank of America Corp rose between 0.2% and 0.9% in premarket trading ahead of their third quarter reports, which would follow better-than-expected numbers from JP Morgan Chase & Co and Citigroup Inc on Tuesday.

In breaking news, Bank of America shares fell about 2% in premarket trading after the lender posted third-quarter results that missed on revenue.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 3541.00 will signal a resumption of the uptrend. The main trend changes to down on a move through 3198.00.

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

The short-term range is 3576.25 to 3198.00. Its retracement zone at 3431.75 to 3387.00 is the nearest support area. This zone is also controlling the direction of the index.

Daily Swing Chart Technical Forecast

The index is currently posting a second consecutive inside day. This usually indicates investor indecision and impending volatility.  Monday’s range is 3541.00 to 3464.25. Its 50% level at 2502.50 is currently being tested. Trader reaction to this level will determine the direction of the index on Wednesday.

Bullish Scenario

A sustained move over 3502.75 will indicate the presence of buyers. If this creates enough upside momentum then look for the rally to possibly extend into 3541.00. Taking out this level could trigger an acceleration into the next main top at 3576.25.

Bearish Scenario

A sustained move under 3502.75 will signal the presence of sellers. This could trigger an acceleration into Monday’s low at 3464.25. If this level fails as support then look for the selling to possibly extend into the Fibonacci level at 3431.75.