E-mini S&P 500 Index (ES) Futures Technical Analysis – Weekly Failure at 2711.50 Could Trigger Steep Break into 2636.00

March E-mini S&P 500 Index futures opened the week flat after posting a two-sided trade last week. Helping to support the index early in the week was optimism over a U.S.-China trade deal and better-than-expected earnings. However, investors began to book profits and shed risky positions after negative news broke about U.S.-China trade negotiations. After hitting its highest level since December 4, the index finish only slightly better for the week.

At 01:49 GMT, March E-mini S&P 500 Index futures are trading 2701.00, down 5.25 or 0.19%.

Weekly Technical Analysis

The main trend is down according to the weekly swing chart. However, momentum has been trending higher since the closing price reversal bottom was formed during the week-ending December 28.

This week is the seventh week up from the last main bottom. This puts the index inside the window of time for a potentially bearish weekly closing price reversal top. If formed and confirmed, this could lead to the start of a 2 to 3 week correction.

The main range is 2955.50 to 2316.75. Its retracement zone at 2636.00 to 2711.50 is controlling the longer-term direction of the index. The index is currently trading inside this zone.

Weekly Technical Forecast

Based on last week’s close at 2706.25 and Monday’s early price action, the direction of the March E-mini S&P 500 Index the rest of the week is likely to be determined by trader reaction to the major Fibonacci level at 2711.50.

Bullish Scenario

A sustained move over 2711.50 will indicate the presence of buyers. The first target is last week’s high at 2737.75. Taking out this level could trigger a rally into the steep uptrending Gann angle at 2764.75.

Overtaking 2764.75 will put the index in a bullish position. This could extend the rally into the downtrending Gann angle at 2787.50.

Overcoming 2787.50 will indicate the buying is getting stronger with additional targets a pair of minor tops at 2819.00 and 2824.50. These are followed by another downtrending Gann angle at 2871.50.

Bearish Scenario

A sustained move under 2711.50 will signal the presence of sellers. If this move generates enough downside momentum then look for a potential spike into the main 50% level at 2636.00, followed by a downtrending Gann angle at 2619.50.

Crossing to the weak side of the angle at 2619.50 could trigger an acceleration to the downside with the next target angle coming in at 2540.75.

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