E-mini S&P 500 Index (ES) Futures Technical Analysis – Trend Change on Rally Through 3934.50

March E-mini S&P 500 Index futures are expected to open higher based on a relatively strong pre-market trade. Underpinning the market on Thursday are weaker Treasury yields.

Yields were initially pressured by yesterday’s tepid U.S. consumer inflation report and an adequate 10-year Treasury auction. Prices received a boost on Thursday after U.S. weekly jobless claims fell more than expected.

At 14:06 GMT, March E-mini S&P 500 Index futures are trading 3923.75, up 27.25 or +0.70%.

Fewer than expected Americans filed new claims for unemployment benefits last week as an improving public health environment allows more segments of the economy to reopen, putting the labor market recovery back on track, Reuters wrote.

Initial claims for state unemployment benefits totaled a seasonally adjusted 712,000 for the week ended March 6, compared to 754,000 in the prior week, the Labor Department said on Thursday. Economists polled by Reuters had forecast 725,000 applications in the latest week.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, however, momentum is trending higher. A trade through 3934.50 will change the main trend to up. A move through 3720.50 will signal a resumption of the downtrend.

The minor trend is up. This confirms the shift in momentum.

The short-term range is 3959.25 to 3720.50. The market is trading on the bullish side of its retracement zone at 3868.00 to 3839.75, giving the index a strong upside bias.

Additional support levels are a pair of 50% levels at 3807.75 and 3777.50.

Daily Swing Chart Technical Forecast

The direction of the March E-mini S&P 500 Index into the close on Thursday will be determined by trader reaction to 3896.50.

Bullish Scenario

A sustained move over 3896.50 will indicate the presence of buyers. This could trigger a move into the first main top at 3934.50.

Taking out 3934.50 will change the main trend to up. If this creates enough upside momentum then look for a surge into the record high at 3959.25.

Bearish Scenario

A sustained move under 3896.50 will signal the presence of sellers. This will also put the index in a position to form a potentially bearish closing price reversal top. The first downside target is 3868.00, followed by 3839.75.

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