E-mini S&P 500 Index (ES) Futures Technical Analysis – September 27, 2016 Forecast

December E-mini S&P 500 Index futures are called higher on the opening based on the overnight trade. After early session weakness, the index began to rally when it became clear that Democratic candidate Clinton performed better than Republican candidate Trump in last night’s first presidential debate.

Clinton’s “win” gave investors the green light to take on risky assets and to buy stocks. A “win” by Trump would’ve caused turmoil in the markets.

Traders can now focus on the economy and Fed policy until the next scheduled debate in two weeks. Traders will also be monitoring the OPEC meeting in Algiers and its impact on crude oil prices. Weakness in the crude oil market can put a lid on the S&P rally since the index is heavily weighted in energy stocks.

TECHNICAL ANALYSIS

The main trend is down according to the daily swing chart. A trade through 2172.75 will change the main trend to up and erase the potentially bearish secondary lower top chart pattern. A trade through 2100.25 will reaffirm the downtrend.

Based on the new 2-day top at 2172.75, I have to conclude that momentum is slowly shifting to the downside.

The main range is 2100.25 to 2172.75. Its retracement zone at 2136.50 to 2128.00 is the primary downside target. This zone was tested successfully earlier in the session when the market traded down to 2133.25.

FORECAST

BASED ON THE CURRENT PRICE AT 2144.00, THE DIRECTION OF THE E-MINI S&P 500 INDEX TODAY IS LIKELY TO BE DETERMINED BY TRADER REACTION TO THE UPTRENDING ANGLE AT 2144.25.

A SUSTAINED MOVE OVER 2144.25 WILL SIGNAL THE PRESENCE OF BUYERS. TAKING OUT THE NEXT DOWNTRENDING ANGLE AT 2148.75 IS LIKELY TO TRIGGER AN ACCELERATION TO THE UPSIDE WITH THE NEX TARGETS COMING IN AT 2156.75 AND 2160.75.

A SUSTAINED MOVE UNDER 2144.25 WILL INDICATE THE PRESENCE OF SELLERS. THIS COULD TRIGGER A RETURN BREAK INTO THE MAIN 50% LEVEL AT 2136.50 AND THE INTRADAY LOW AT 2133.25.

TAKING OUT 2133.25 COULD DRIVE THE INDEX INTO THE FIBONACCI LEVEL AT 2128.00, FOLLOWED BY AN UPTRENDING ANGLE AT 2122.25.

WATCH THE PRICE ACTION AND READ THE ORDER FLOW AT 2144.25 TODAY. TRADER REACTION TO THIS ANGLE WILL DETERMINE THE DIRECTION OF THE INDEX TODAY.