E-mini S&P 500 Index (ES) Futures Technical Analysis – Trader Reaction to 3872.00 Sets Tone into Close

March E-mini S&P 500 Index futures are edging lower at the mid-session on Tuesday after posting solid gains the previous session. Helping to put a drag on prices were concerns over relatively high bond yields as well as worries over the progress on the next round of fiscal stimulus negotiations.

The technology sector weighed the most on the benchmark S&P 500 Index. Healthcare, materials and energy stocks extended gains from the previous session.

At 16:36 GMT, March E-mini S&P 500 Index futures are trading 3884.00, down 14.75 or -0.38%.

The U.S. bond market has stabilized since a selloff sent the benchmark 10-year Treasury yield to a one-year high last week, but continue to remain elevated, sparking fears over high valuations in the stock market and emerging as a competitive alternative to equities.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. Tuesday’s inside trading range suggests investor indecision and impending volatility.

A trade through 3934.50 will change the main trend to up. A move through 3785.00 will signal a resumption of the downtrend.

The minor range is 3959.25 to 3785.00. The market is currently trading on the strong side of its 50% level at 3872.00.

The short-term range is 3656.50 to 3959.25. Its 50% level at 3807.75 is potential support. This is followed by an additional 50% level at 3779.00.

Daily Swing Chart Technical Forecast

The early price action suggests the direction of the March E-mini S&P 500 Index will be determined by trader reaction to 3872.00.

Bullish Scenario

A sustained move over 3872.00 will indicate the presence of buyers. Turning higher for the session will indicate the buying is getting stronger with the next target the main top at 3934.50. Taking out this level will change the main trend to up with 3959.25 the next likely upside target.

Bearish Scenario

A sustained move under 3872.00 will signal the presence of sellers. The first downside target is a pivot at 3848.50, followed by a 50% level at 3807.75, a minor bottom at 3785.00 and another 50% level at 3779.00.

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