E-mini S&P 500 Index (ES) Futures Technical Analysis – Confirmation of Reversal Top Could Drive Index Into 2755.25

James Hyerczyk
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E-mini S&P 500 Index futures reached their highest level since February 2 last week before turning south and posting a potentially bearish closing price reversal top on the weekly chart. Strong earnings and revenue reports kept the rally alive early in the week, but investors decided it may have been time to cash in after President Trump issued a new warning over tariffs against China.

For the week, September E-mini S&P 500 Index futures settled at 2800.75, down 2.50 or -0.09%.

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Weekly September E-mini S&P 500 Index

Weekly Technical Analysis

The main trend is up according to the weekly swing chart. However, momentum may be getting ready to shift to the downside with the formation of the closing price reversal top. A trade through 2789.75 will confirm the chart pattern. This could fuel the start of a 2 to 3 week correction.

A trade through 2818.25 will negate the chart pattern and signal a resumption of the uptrend. The main trend will change to down on a move through the last swing bottom at 2693.25.

The main range is 2889.00 to 2538.75. Its retracement zone at 2755.25 to 2713.75 is controlling the long-term direction of the index. Treat this zone as support throughout the week. Currently, it’s trading on the strong side of the zone, giving it an upside bias. Crossing to the weak side of the zone under 2713.75 will change the bias to down.

Weekly Technical Forecast

Based on last week’s close at 2800.75, the direction of the September E-mini S&P 500 Index this week is likely to be determined by trader reaction to the downtrending Gann angle at 2789.00.

Holding above 2789.00 will indicate the presence of buyers. If this creates enough upside momentum then look for a retest of 2818.25.

Taking out 2818.25 will indicate the buying is getting stronger. This could trigger a rally into an uptrending angle at 2821.25. Breaking through this angle could drive the index into a downtrending Gann angle at 2839.00.

Look for sellers on the first test of 2839.00. Overcoming this angle, however, could drive the index into the next downtrending Gann angle at 2864.00. This is the last potential resistance angle before the 2889.00 main top.

A sustained move under 2789.00 will signal the presence of sellers. This could trigger an acceleration to the downside with a target angle coming in at 2757.25 and the main Fibonacci level at 2755.25.

Additional support is a pair of uptrending Gann angles 2730.75 and 2725.25, followed by the main 50% level at 2713.75. This is the last support before the 2693.25 main bottom.

This article was originally posted on FX Empire

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