E-mini S&P 500 Index (ES) Futures Technical Analysis – Weekly Reversal Bottom Confirmed on Trade Through 2523.00

March E-mini S&P 500 Index futures closed higher last week while posting a volatile two-sided trade. On December 24, the index had its worst Christmas Eve performance in history. Two days later it posted its biggest one-day gain in 10 years. Don’t expect the volatility to go away either amid concerns over the partial government shutdown, uncertainty over Fed policy and the ongoing trade dispute between the United States and China.

Last week, March E-mini S&P 500 Index futures settled at 2486.00, up 72.50 or +2.92%.

Weekly Swing Chart Technical Analysis

The main trend is down according to the weekly swing chart. However, momentum may be getting ready to shift to the upside following last week’s dramatic and potentially bullish closing price reversal bottom.

The market is in no position to change the main trend to up. A trade through 2316.75 will negate the closing price reversal bottom and signal a resumption of the downtrend.

The major support is a long-term retracement zone at 2368.50 to 2231.00.

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

Weekly Swing Chart Technical Forecast

Based on last week’s closing price reversal bottom and close at 2486.00, the direction of the March E-mini S&P 500 Index this week is likely to be determined by trader reaction to last week’s high at  2523.00.

Bullish Scenario

A sustained move over 2523.00 will confirm the closing price reversal bottom. If this move is able to generate enough upside momentum then look for a potential rally into the retracement zone at 2636.25 to 2711.50. Since the main trend is down, sellers are likely to come in on a test of this zone.

Overcoming 2711.50 will indicate the buying is getting stronger with potential targets coming in at 2819.00 and 2824.50.

Bearish Scenario

The inability to overcome or sustain a rally over 2523.00 will signal the presence of sellers. This could lead to a short-term break into 2419.75. Aggressive counter-trend buyers could come in on a test of this level, but if it fails then look for a retest of the major 50% level at 2368.50, followed by last week’s low at 2316.75.

The downtrend will resume under 2316.75 with the major Fibonacci level at 2231.00 the next major target.