E-mini S&P Strengthens Over 4474.75, Weakens Under 4419.25
March E-mini S&P 500 Index futures are edging lower during the pre-market session on Friday but well-off its low after bottom-pickers came in to take advantage of bargain-basement prices.
U.S. traders followed Asia and Europe lower overnight as fears about the pace of monetary policy tightening and a batch of weaker-than-expected earnings knocked investor confidence again.
At 10:05 GMT, March E-mini S&P 500 Index futures are trading 4470.25, down 4.50 or -0.10%. This is up from an early low of 4429.50. On Thursday, the S&P 500 Trust ETF (SPY) settled at $446.81, down $4.94 or -1.09%.
The benchmark index fell sharply after the cash market close on Thursday after shares of Netflix tumbled 19% after the company’s fourth-quarter earnings report showed a slowdown in subscriber growth.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. A trade through the intraday low of 4429.50 will signal a resumption of the downtrend.
A move through 4739.50 will change the main trend to up. This is highly unlikely, but due to the prolonged move up in terms of price and time, the index is ripe for a potentially bullish closing price reversal bottom.
The intermediate range is 4252.75 to 4808.25. The index is currently straddling is Fibonacci level at 4466.00.
On the upside, potential resistance levels come in at 4531.50 and 4584.50.
On the downside, the nearest support is a 50% level at 4419.25, followed by a retracement zone at 4327.50 to 4266.00.
Daily Swing Chart Technical Forecast
The direction of the March E-mini S&P 500 Index on Friday is likely to be determined by trader reaction to 4474.75.
A sustained move under 4474.75 will indicate the presence of sellers. A move under 4465.75 will indicate the selling pressure is getting stronger. Taking out 4429.50 and 4419.25 will be a further sign of weakness.
The 50% level at 4419.25 is a potential trigger point for an acceleration to the downside with 4327.50 the next major target.
A sustained move over 4474.75 will signal the presence of buyers. If this move creates enough upside momentum then look for the buying to extend into 4531.50, followed by 4584.50.
A close over 4474.75 will form a potentially bullish closing price reversal bottom. If confirmed, this could trigger the start of a 2 to 3 day correction.