E-mini S&P 500 Index (ES) Futures Technical Analysis – Upside Momentum Points Toward Drive into 2570.75 to 2630.50

March E-mini S&P 500 Index futures finished higher last week, led by a spectacular rally on Friday. The move was fueled by optimism over US-China trade relations, a robust U.S. jobs report and dovish remarks by Fed Chair Jerome Powell. Value investors re-emerged and bearish traders covered their short positions as fears of a global economic slowdown eased.

Last week, March E-mini S&P 500 index futures settled at 2531.25, up 45.25 or +1.79%.

Weekly Technical Analysis

The main trend is down according to the weekly swing chart. However, momentum shifted to the upside with the closing price reversal bottom the week-ending December 28 and its subsequent confirmation last week. The chart pattern often triggers a 2 to 3 week counter-trend rally and a 50% to 61.8% retracement of previous breaks.

The main trend on the weekly chart changes to up on a trade through 2955.50 so we are looking at the possibility of a strong counter-trend rally. A trade through 2316.75 will negate the closing price reversal bottom and signal a resumption of the downtrend.

The minor trend is also down. It changes to up on a trade through 2824.50.

The major support area is a long-term retracement zone at 2368.50 to 2231.00. The recent bottom at 2316.75 was formed inside this zone.

The minor range is 2824.50 to 2316.75. Its retracement zone at 2570.75 to 2630.50 is the first upside target. Since the main trend is down, sellers are likely to come in on the initial test of this zone.

The main range is 2955.50 to 2316.75. Its retracement zone at 2636.25 to 2711.50 is the primary upside target.

Combining the two retracement zones creates a potential resistance cluster at 2630.50 to 2636.25. This will be an attractive area for short-sellers and profit-takers.

Weekly Technical Forecast

If the upside momentum from last week continues then look for the rally to extend into the 50% level at 2570.75. Look for sellers on the first test of this level. Overtaking it will indicate the buying is getting stronger. This could trigger a further rally into the resistance cluster at 2630.50 to 2636.25. Expect even stronger selling pressure on the initial test of this area.

If 2570.75 is rejected by sellers then watch the price action and order flow closely. If heavy volume comes in on the move then look for a possible retracement all the way back to the nearest uptrending Gann angle at 2444.75.

At some point over the near-term, the March E-mini S&P 500 Index is going to retrace about 50% of its first rally from 2316.75 so keep that info on your backburner.