E-mini S&P 500 Index (ES) Futures Technical Analysis – Sellers Targeting 3122.75 to 3109.00 Retracement Levels

December E-mini S&P 500 Index futures slipped on Friday in a post-holiday shortened session as a U.S.-China discord over Hong Kong reignited trade tensions and retail stocks slipped on signs of a tepid start to in-store Black Friday sales.

The index was pressured early after China threatened on Thursday to retaliate against a U.S. law backing pro-democracy protesters in Hong Kong. The measure could include barring drafters of the legislation from mainland China, Hong Kong and Macau, the editor of China’s state-backed Global Time tabloid said in a tweet.

On Friday, December E-mini S&P 500 Index futures settled at 3143.75, down 10.00 or -0.32%.

Daily Technical Analysis

The main trend is up according to the daily swing chart. A trade through 3155.00 will signal a resumption of the uptrend. The main trend will change to down on a move through 3020.25. This move is highly unlikely, however, there is room for a normal retracement.

The minor trend is also up. The minor trend will change to down on a move through 3090.75. This will also shift momentum to the downside.

The first minor range is 3090.75 to 3155.00. Its 50% level or pivot is 3122.75.

The second minor range is 3075.75 to 3155.00. Its 50% level Is 3115.25.

The third minor range is 3063.00 to 3155.00. Its pivot is 3109.00.

The main range is 3020.25 to 3155.00. Its retracement zone at 3087.50 to 3071.75 is the primary downside target.

Short-Term Outlook

You have to take last week’s rally to a record high of 3155.00 with a grain of salt because of the extremely low volume. That being said, I wouldn’t be surprised if the market pulls back to the close on November 22 at 3111.50, erasing all of last week’s price action.

Last week’s lame rally was fueled by optimism over a trade deal. However, with no concrete news last week and investors worried about retaliation from China over the U.S. support of the pro-democracy protesters in Hong Kong, investors may seize the opportunity to book profits and lighten up a little on the long side.

I think we’re going to find out early money if investors are still willing to chase the market higher at current price levels, or if they are more interested in buying value.

If they choose the latter then look for a short-term pullback into the series of 50% levels at 3122.75, 3115.25 and 3109.00.

An uptrending Gann angle at 3104.25 is also a potential downside target. If buyers don’t come in on a test of this angle to stop the price slide then look for a potential acceleration to the downside with the next major target zone coming in at 3087.50 to 3071.75.