E-mini S&P 500 Index (ES) Futures Technical Analysis – Early Strength Over 4705.50, Weakness Under 4694.75

December E-mini S&P 500 Index futures finished higher on Wednesday, lifted by a recovery in the technology sector. Gains were likely capped, however, as Gap and Nordstrom shares tumbled following weak quarterly reports. The benchmark index spent much of the session near flat before climbing just before the close.

On Wednesday, December E-mini S&P 500 Index futures settled at 4699.00, up 10.50 or +0.22%.

Nvidia rallied 2.9% as it bounced back from a selloff in Big Tech stocks early this week. The graphics chipmaker is now up about 150% in 2021.

Nordstrom tumbled 29% and Gap slid 24%, after the two retailers reported weak quarterly results and warned of supply chain problems ahead of the crucial U.S. holiday shopping season.

In other news, the S&P 500 consumer discretionary sector index rose 0.2% after data showed U.S. consumer spending increased more than expected in October.

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 following the confirmation of the closing price reversal top on November 22.

A trade through 4740.50 will negate the closing price reversal top and signal a resumption of the uptrend. A move through 4625.25 will change the main trend to down.

The minor trend is also down. This confirms the shift in momentum. Taking out 4649.00 will mean the downside momentum is getting stronger.

The minor range is 4740.50 to 4649.00. Its retracement zone at 4694.75 – 4705.50 is potential resistance.

The short-term range is 4625.25 to 4740.50. The index closed above its pivot at 4682.75, making it potential support.

The intermediate range is 4543.75 to 4740.50. Its 50% level at 4642.00 is also potential support.

The major support levels are lined up at 4528.75, 4500.25, 4443.50 and 4428.75.

Daily Swing Chart Technical Forecast

The direction of the December E-mini S&P 500 Index early Friday is likely to be determined by trader reaction to 4694.75 to 4705.50

Bullish Scenario

A sustained move over 4705.50 will indicate the presence of buyers. If this move creates enough upside momentum then look for a surge into 4740.50.

Bearish Scenario

A sustained move under 4694.75 will signal the presence of sellers. The first downside target is 4682.75.

Buyers could come in on the first test of 4682.75, but if it fails then look for the selling to possibly extend into 4649.00 to 4642.00. This area is the last potential support before the 4625.25 main bottom.

Taking out 4625.25 will not only change the main trend to down, but it could also trigger an acceleration to the downside with 4528.75 the next major downside target.