E-mini S&P 500 Index (ES) Futures Technical Analysis – Trader Reaction to Fib Level at 2753.75 Sets the Tone

March E-mini S&P 500 Index futures are trading sharply lower shortly after the cash market opening on Monday. Futures opened lower in response to a steep plunge in crude oil prices, set off by the start of price war by Saudi Arabia. The index was down 5% early in the session when the exchange circuit breaker kicked in, shutting down trading temporarily. When it reopened, the index plunged another 2%, triggering another circuit-breaker.

At 13:40 GMT, March E-mini S&P 500 Index futures are trading 2759.50, down 204.50 or -6.90%.

Daily Technical Analysis

The main trend is down according to the daily swing chart. The downtrend was reaffirmed when sellers took out the previous main bottom at 2853.25. The main trend will change to up on a move through 3137.00.

The main range is 2356.00 to 3397.50. The index is currently testing its 50% to 61.8% retracement zone at 2876.75 to 2753.75. This zone is controlling the near-term direction of the index.

Daily Forecast

Based on the early price action and the current price at 2759.50, the direction of the March E-mini S&P 500 Index the rest of the session on Monday is likely to be determined by trader reaction to the Fibonacci level at 2753.75.

Bearish Scenario

A sustained move under 2753.75 will indicate the presence of sellers. The next downside targets are a series of uptrending Gann angles at 2657.25, 2507.00 and 2429.75.

The Gann angle at 2429.75 is the last potential support angle before the 2356.00 main bottom.

Bullish Scenario

A sustained move over 2753.75 will signal the presence of buyers. If this move creates enough upside momentum then look for the rally to possibly extend into the 50% level at 2876.75. Sellers could come in on the first test of this level.

Overcoming 2876.75 will indicate the buying is getting stronger with the next two potential upside targets coming in at 2958.75 and 3013.50.

Buyers will have to overtake 3013.50 to get the bulls a little excited once again.