E-mini S&P 500 Testing Key Short-Term Retracement Zone

March E-mini S&P 500 Index futures are trading higher late Wednesday, putting the benchmark in a position to post a gain for a fourth straight session. Today’s rally was fueled by upbeat earnings from Google-parent Alphabet and chipmaker Advanced Micro Devices.

The index is also being underpinned by an unexpected decline in private payrolls that kept U.S. Treasury yields stable as investors weighed its potential impact on Friday’s broader jobs report.

At 19:23 GMT, March E-mini S&P 500 Index futures are trading 4564.25, up 29.25 or +0.64%. The S&P 500 Trust ETF (SPY) is at $457.61, up $4.66 or +1.03%.

Alphabet rose 8.5% after reporting record quarterly sales after the bell on Tuesday, and said it plans to undertake a 20-to-one stock split.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, however, momentum is trending higher.

A trade through 4739.50 will change the main trend to up. A move through 4212.75 will signal a resumption of the downtrend.

The minor trend is up. This is controlling the momentum. A trade through 4263.25 will change the minor trend to down.

The short-term range is 4808.25 to 4212.75. The index is currently testing its retracement zone at 4510.50 to 4580.75. This zone is controlling the near-term direction of the index.

On the downside, support is a series of retracement levels at 4419.25, 4327.50 and 4266.00.

Short-Term Outlook

The direction of the March E-mini S&P 500 Index is likely to be determined by trader reaction to 4510.50 to 4580.75.

Bearish Scenario

A sustained move under 4510.50 will indicate the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into 4419.25 to 4327.50.

Bullish Scenario

A sustained move over 4580.75 will signal the presence of buyers. This is a potential trigger point for an acceleration to the upside with a pair of main tops at 4739.50 and 4808.25 the next potential upside targets.

Side Notes

With the main trend down, trend-following sellers may try to form a potentially bearish secondary lower top inside 4510.50 to 4580.75. If successful then look for the selling to possibly extend into at least 4419.25. If the counter-trend buying is strong enough to overtake 4580.75 then look for the previously mentioned acceleration to the upside.