U.S. Markets closed

E-mini S&P 500 Index (ES) Futures Technical Analysis – Close Under 3259.00 Forms Closing Price Reversal Top

James Hyerczyk

March E-mini S&P 500 Index futures are trading lower at the mid-session on Friday, but the market has clawed back more than half of its earlier loss.  After touching a record high during the pre-market session, the benchmark index plunged to its lowest level since December 19 in reaction to escalated tensions between the United States and Iran.

At 17:45 GMT, March E-mini S&P 500 Index futures are trading 3244.75, down 14.25 or -0.44%.

The early price action suggests the market may be forming a potentially bearish closing price reversal top. This won’t change the trend but it could signal the start 0f a 2 to 3 day break or a 50% correction of the rally which began on December 3.

Daily March E-mini S&P 500 Index

Daily Technical Analysis

The main trend is down according to the daily swing chart. The main trend turned down on Friday when sellers took out the swing bottom at 3213.00. A trade through 3263.50 will change the main trend to up.

The minor range is 3263.50 to 3206.75. Its 50% level at 3235.00 is controlling the direction of the market late in the session.

The second minor range is 3192.00 to 3263.50. Its 50% level at 3227.75 is additional intraday support.

The third minor range is 3118.25 to 3263.50. Its retracement zone is a potential downside target.

The main range is 3071.00 to 3263.50. Its retracement zone at 3167.25 to 3144.50 is the best support area and value zone. A break into this zone is likely to attract buyers.

Daily Technical Forecast

Based on the early price action and the last price at 3244.75, the direction of the March E-mini S&P 500 Index into the close on Friday is likely to be determined by trader reaction to the first pivot at 3235.00.

Bullish Scenario

A sustained move over 3235.00 will indicate the presence of buyers. Overcoming a pair of uptrending Gann angles at 3239.00 and 3246.25 will indicate the buying is getting stronger. If this creates enough upside momentum then look for a potential retest of the intraday high at 3263.50.

Bearish Scenario

A sustained move under 3235.00 will signal the presence of sellers. The first target is 3227.75. This is a potential trigger point for an acceleration into the intraday low at 3206.75.

If 3206.75 fails then look for the selling to extend into a 50% level at 3190.75, followed by an uptrending Gann angle at 3182.25.

Side Note

A close under 3259.00 will form a closing price reversal top. If confirmed on Monday, this could lead to a 2 to 3 day break or a plunge into 3167.25 to 3144.50.

This article was originally posted on FX Empire