E-mini S&P 500 Index (ES) Futures Technical Analysis – Weakens Under 3839.75, Strengthens Under 3868.00

March E-mini S&P 500 Index futures are edging lower shortly before the cash market opening on Monday. The price action indicates that investors weren’t too impressed with the Senate passage of the new stimulus package over the weekend.

The COVID-relief news probably would’ve been bullish if the economy was still showing signs of a slow recovery. Since it was initially proposed in January, conditions have improved greatly and interest rates have soared. Traders are reacting negatively to the news as Treasury yields move toward one-year highs, weighing on demand for technology-based stocks.

At 11:15 GMT, March E-mini S&P 500 Index futures are trading 3822.50, down 16.50 or -0.43%.

We could see a late session turnaround in the market if June 10-year Treasury notes come off their lows.

Daily Swing Chart Technical Analysis

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

The minor range is 3959.25 to 3720.50. Its retracement zone at 3840.00 to 3868.00 is resistance.

On the downside, support is a pair of 50% levels at 3807.75 and 3777.50.

Daily Swing Chart Technical Forecast

The early price action suggests the direction of the March E-mini S&P 500 Index on Monday will be determined by trader reaction to 3840.00.

Bearish Scenario

A sustained move under 3840.00 will indicate the presence of sellers. This could lead to a labored break with the first target 3807.75, followed by 3777.50. The latter is a potential trigger point for an acceleration into last week’s low and current main bottom at 3720.50.

Bullish Scenario

A sustained move over 3840.00 will signal the presence of buyers. If this move is able to gain traction then look for a sharp rally with potential targets a pair of main tops at 3934.50 and 3959.25.

Side Notes

The market is struggling with trend-following sellers trying to form a potentially bearish secondary lower top and aggressive counter-trend buyers trying to make 3720.50 and new secondary higher bottom.