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E-mini S&P 500 Index (ES) Futures Technical Analysis – Reversal Top at 2991.50 Capping Gains; Weakens Under 2965.50

James Hyerczyk

September E-mini S&P 500 Index futures are trading flat shortly before the cash market opening on Wednesday but with a slight upside bias since it traded through yesterday’s high earlier in the session. The market is being underpinned by improving relations between the U.S. and China, but capped by a number of factors including a weak technology sector and a rotation out of growth stocks and into value shares. The market is also up 11 sessions from its last main bottom so it may be ripe for a short-term correction.

At 10:09 GMT, September E-mini S&P 500 Index futures are trading 2979.00, up 0.50 or +0.03%.

Daily September E-mini S&P 500 Index

Daily Technical Analysis

The main trend is up according to the daily swing chart, however, momentum is trending lower following the formation of the closing price reversal top on Monday at 2991.50 and the subsequent confirmation of the chart pattern yesterday.

A trade through 2991.50 will negate the closing price reversal top and signal a resumption of the uptrend.

The minor trend is up. A trade through 2957.25 will turn the minor trend to down. This will confirm the shift in momentum to the downside.

The short-term retracement zone at 2932.50 to 2902.50 is the nearest support.

Daily Technical Forecast

Based on the early price action, and the current price at 2979.00, the direction of the September E-mini S&P 500 Index into the close is likely to be determined by trader reaction to the uptrending Gann angle at 2986.25.

Bullish Scenario

A sustained move over 2986.25 will indicate the presence of buyers. Overcoming this angle will put the index in a strong position. Taking out 2991.50 will indicate the buying is getting stronger. This could lead to a test of a downtrending Gann angle at 2997.50.

The Gann angle at 2997.50 is the last potential resistance angle before the 3029.50 main top.

Bearish Scenario

A sustained move under 2986.25 will signal the presence of sellers. The first target angle comes in at 2965.50.

Crossing to the weak side of the angle at 2965.50 will indicate the selling is getting stronger. Taking out the minor bottom at 2957.25 could trigger an acceleration to the downside with the short-term Fibonacci level at 2932.50 the next major target.

This article was originally posted on FX Empire

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