E-mini S&P 500 Index (ES) Futures Technical Analysis – Trader Reaction to 4605.75 Sets the Tone

December E-mini S&P 500 Index futures are trading higher shortly after the cash market opening, putting it in a position to post another record high. The price action suggests investors aren’t too concerned about the Fed ahead of its two-day meeting. This is probably because the central bank has done a very good job at telegraphing its intentions to begin tapering stimulus and to start raising interest rates.

At 14:24 GMT, December E-mini S&P 500 Index futures are trading 4616.50, up 10.75 or +0.23%.

In sector-related news, Communication Services are up 0.55%, followed Health which is posting a 0.56% gain. The Energy Sector is down 0.47%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 4619.50 will signal a resumption of the uptrend.

A move through 4260.00 will change the main trend to down. This is highly unlikely but due to the prolonged move up in terms of price and time, the index is ripe for a potentially bearish closing price reversal top. This won’t change the trend to down, but if confirmed, it could trigger the start of a 2 to 3 day correction or perhaps 50% of the rally.

The minor trend is also up. A trade through 4543.75 will change the minor trend to down. This will also shift momentum to the downside.

The minor range is 4543.75 to 4619.50. Its 50% level or pivot at 4581.50 is the first support.

The second minor range is 4317.25 to 4619.50. If the minor trend changes to down then look for the selling to possibly extend into its 50% level at 4468.25.

Daily Swing Chart Technical Forecast

The direction of the December E-mini S&P 500 Index on Tuesday is likely to be determined by trader reaction to 4605.75.

Bullish Scenario

A sustained move over 4605.75 will indicate the presence of buyers. If this creates enough upside momentum then look for a surge into 4619.50. This price is a potential trigger point for an acceleration to the upside.

Bearish Scenario

A sustained move under 4605.75 will signal the presence of sellers. The first downside target is 4581.50.

Look for a technical bounce on the first test of 4581.50. A failure at this level will indicate the selling pressure is getting stronger. This could trigger a further break into the minor bottom at 4543.75.