E-mini S&P 500 Index (ES) Futures Technical Analysis – Minor Pivot at 3233.50 Controlling Price Action
March E-mini S&P 500 Index futures settled higher on Tuesday, the last trading day of the year. The close wrapped a year that featured a historical performance as well as several record highs. The resilience of consumers and the nimbleness of the Federal Reserve helped support the market throughout the year, but it was the end of the prolonged trade dispute between the United States and China that garnered the most attention in December.
On Tuesday, March E-mini S&P 500 Index futures settled at 3231.00, up 7.50 or +0.23%.
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Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. However, momentum has been trending lower since the formation of the closing price reversal top on December 27.
A trade through 3254.00 will negate the closing price reversal top. The main trend will change to down on a trade through the last main bottom at 3071.00.
The minor trend is down. It changed to down on a move through the last minor bottom at 3222.50. This move confirmed the shift in momentum.
The first minor range is 3254.00 to 3213.00. Its 50% level or pivot at 3233.50 is the first upside target. If tested, sellers may come in to try to form a secondary lower top.
The second minor range is 3192.00 to 3254.00. Its retracement zone at 3223.00 to 3215.75 was tested on Tuesday.
The third minor range is 3118.25 to 3254.00. Its retracement zone at 3186.00 to 3170.00 is the next downside target.
The main range is 3071.00 to 3254.00. Its retracement zone at 3162.50 to 3141.00 is major support. This zone represent value. Since the trend is up, buyers are likely to step in on a test of this area.
Short-Term Outlook
The strong close on Tuesday suggests the selling may be over. However, the next move is likely to be determined by trader reaction to the 50% level at 3233.50.
If sellers stop the rally at 3233.50 then they are going to try to form a secondary lower top. If buyers can overcome this level then they are going to try to attack the main top at 3254.00.
Side Notes
The first leg down from a major top is usually fueled by profit-taking. After a rally, the next break is usually triggered by short-selling. This usually forms the secondary lower top. That’s the pattern we’ll be looking for on Thursday.