U.S. Markets closed

E-mini S&P 500 Index (ES) Futures Technical Analysis – Holding Pivot at 3037.50 Will Generate Upside Bias

James Hyerczyk

A turnaround in the Asian markets is helping to underpin December E-mini S&P 500 Index futures early Friday. Traders appear to be shrugging off concerns over the potential for a long-term trade deal between the United States and China that pressured the market the previous session.

Perhaps helping to boost the index is a private survey of factory activity in China, which showed manufacturing activity in the country expanded more than expected in October.

Investors could also be squaring positions ahead of the release of the U.S. Non-Farm Payrolls report and ISM Manufacturing PMI report. Several Fed speakers are also on tap later in the session.

It’s hard to figure out if the reports will have much of an impact on the market since the Fed already signaled on Wednesday that it was hitting the pause button on rate cuts. Fed Chair Jerome Powell also said the central bank won’t raise interest rates until inflation is “substantially” higher. Since inflation is well below the Fed’s 2% target, this news is potentially bullish for stocks.

At 05:50 GMT, December E-mini S&P 500 Index futures are trading 3044.25, up 8.50 or +0.28%.

Daily December E-mini S&P 500 Index

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, momentum is trending lower. A trade through 3055.00 will signal a resumption of the uptrend. The main trend will change to down on a move through the last main bottom at 2881.75. This is higher unlikely, however, due to the prolonged move up in terms of price and time, the index is in the window of time for a potentially bearish closing price reversal top.

A trade through 3055.00 then a lower close will form a daily closing price reversal top. If confirmed, this could trigger the start of a 2 to 3 correction. A close under 3020.25 will form a weekly closing price reversal top. This price stopped the selling on Thursday.

The first minor range is 3055.00 to 3020.25. Its 50% level or pivot at 3037.50 is controlling the direction of the market early Friday.

The second minor range is 2982.00 to 3055.00. Its 50% level at 3018.50 is the first downside target.

The third minor range is 2975.00 to 3055.00. Its 50% level at 3015.00 is the second downside target.

The short-term range is 2881.75 to 3055.00. Its 50% level at 2968.25 is the first major downside target.

Daily Swing Chart Technical Forecast

Based on the early price action and the current price at 3044.25, the direction of the December E-mini S&P 500 Index on Monday is likely to be determined by trader reaction to the first minor pivot at 3037.50.

Bullish Scenario

A sustained move over 3037.50 will indicate the presence of buyers. If this creates enough upside momentum then look for the rally to possibly lead to a test of the all-time high at 3055.00. This is a potential trigger point for an acceleration to the upside.

Bearish Scenario

A sustained move under 3037.50 will signal the presence of sellers. This could trigger a break into the support cluster at 3018.50, 3020.25 and 3015.00.

The 50% level at 3015.00 is a potential trigger point for an acceleration to the downside with the next targets coming in at 2982.00, 2975.00 and 2968.25.

This article was originally posted on FX Empire