E-mini S&P 500 Index (ES) Futures Technical Analysis – October 17, 2018 Forecast
December E-mini S&P 500 Index futures are trading slightly lower in the pre-market session after giving up earlier gains. There was very little follow-through to the upside after yesterday’s stellar gains. The early rally also fell short of the key retracement zone that is likely to determine the near-term direction of the index.
At 1121 GMT, December E-mini S&P 500 Index futures are trading 2810.25, down 7.75 or -0.28%.
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Daily Technical Analysis
The main trend is down according to the daily swing chart. A trade through 2712.25 will signal a resumption of the downtrend. The main trend will change to up on a move through 2947.00.
The minor trend is also down. A trade through 2900.00 will change the minor trend to up and shift momentum to the upside.
The short-term range is 2947.00 to 2712.25. Its retracement zone at 2829.75 to 2857.25 is the primary upside target. Trader reaction to this zone is likely to determine the near-term direction of the index.
Since the main trend is down, look for short-sellers to come in on a test of 2829.75 to 2857.25. They are going to attempt to form a secondary lower top. Overtaking this zone will indicate the buying is getting stronger. This will also make 2712.25 an important secondary higher bottom.
On the downside, the major support is the annual 50% to 61.8% resistance zone at 2748.50 to 2701.75.
Daily Technical Forecast
Based on the early price action, the direction of the December E-mini S&P 500 Index on Wednesday is likely to be determined by trader reaction to the 50% level at 2829.75 and the downtrending Gann angle at 2803.00. Trading in between this levels will produce a choppy two-sided trade.
A sustained move under 2803.00 will indicate the presence of sellers. This could drive the index into the next uptrending Gann angle at 2776.25. If this angle fails as support then look for a potential acceleration to the downside with a support cluster at 2748.50 to 2744.25 the next likely target.
Overtaking and sustaining a rally over 2829.75 will signal the presence of buyers. The move over this level is likely to be labored with the next target a Fibonacci level at 2857.25. Overtaking this level could trigger a further move into the next downtrending Gann angle at 2875.00.
Looking at the bigger picture, the next major move in the index will be determined by trader reaction to the retracement zone at 2829.75 to 2857.25.