September E-mini S&P 500 Index futures finished higher for the first time in five weeks, setting the stage for a continuation of the rally this week. The rally was fueled by a shift in sentiment to “risk-on” after the United States and China agreed to resume trade talks on Thursday, September 5. This news helped ease tensions over a possible recession despite an inversion of the 2-year/10-year Treasury market yield curve that is often used to predict this economic phenomenon.
Last week, September E-mini S&P 500 Index futures settled at 2924.75, up 69.25 or +2.37%.
Weekly Swing Chart Technical Analysis
The main trend is up according to the weekly swing chart. A trade through 3029.50 will signal a resumption of the uptrend. A move through 2775.75 will change the main trend to down.
The main range is 2347.25 to 3029.50. Its retracement zone at 2688.25 to 2607.75 is major support. This zone is controlling the longer-term trend.
The intermediate range is 2732.25 to 3029.50. Its retracement zone at 2880.75 to 2845.75 is support. This is the last support before the 2775.75 main bottom.
The short-term range is 3029.50 to 2775.75. Its retracement zone at 2902.50 to 2932.50 is resistance. This zone is controlling the near-term direction of the market.
Weekly Swing Chart Technical Forecast
Based on last week’s price action and the close at 2924.75, the direction of the September E-mini S&P 500 Index this week is likely to be determined by trader reaction to the short-term Fibonacci level at 2932.50.
A sustained move over 2932.50 will indicate the presence of buyers. Taking out last week’s high at 2944.25 will indicate the buying is getting stronger. This could trigger an acceleration to the upside with the next major target the all-time high at 3029.50.
A sustained move under 2932.50 will signal the presence of sellers. This could lead to a labored break with potential support levels coming in at 2902.50, 2880.75 and 2845.75.
Taking out 2845.75 will indicate the selling is getting stronger. This could lead to a test of the minor bottom at 2810.25. Breaking through this minor bottom will change the minor trend to down and shift momentum to the downside.
A failure at 2775.75 will change the main trend to down with the next targets a main bottom at 2732.25 and the major 50% level at 2688.25.
This article was originally posted on FX Empire
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