S&P 500 E-mini Futures Weekly Technical Analysis: A Simplified View

In this technical analysis of the S&P 500 E-mini futures, we focus on the weekly timeframe to provide a clear and simplified picture without using numerous indicators. The aim is to decrypt the story the S&P 500 is telling and identify potential entry points for a bullish ride to 4200.

Price Action Analysis: Bullish Piercing and Trapping of Bears

On the weekly chart, we observe that the price went below the previous week’s low and the 20 EMA (black line). This action triggered stop-loss orders for long positions and motivated bears to go short, trapping them in the process. The presence of two wicks on consecutive weeks and a close near the previous week’s open signals bullish piercing and trapping of bears, indicating a bullish bias.

Key Resistance Level: 4200

The next significant price level to watch is the resistance at 4200, which has been tested multiple times but not conquered since August 2022. A weekly candle close above this level would confirm a bullish bias.

A Line in the Sand: Weekly Close Below 20 EMA

A weekly candle close below the 20 EMA (currently at 4081.25) would signal that the bullish case is over, and traders should reassess their positions.

Regression Trend Analysis: Bullish Channel

Using a regression trend from the October 2022 pivot low and adjusting it to two standard deviations, we see that the price is trading within a bullish channel. The current position in the green part of the channel suggests a potential move to test the 4300 level.

Daily Timeframe: Potential Entry Points for a Bullish Ride

For those looking to join the bullish ride, a possible entry point is around 4130, close to the 20 EMA. This level could provide a good risk-reward ratio with a target of 4200. Traders can choose a stop-loss level below 4100 (e.g., 4096) to minimize risk.

Reward vs. Risk: A Legitimate Long Trade

As the ES technical analysis video above shows as an orientation for traders and investors to consider (at their own discretion), if executed at 4130, the long trade targeting 4200 offers a reward-to-risk ratio of over 2:1, making it a legitimate and attractive trade for potential bulls.

Summary: Bullish Bias Until 4200

In conclusion, the simplified technical analysis of the S&P 500 E-mini futures suggests a bullish bias until the 4200 level is reached. Traders should monitor key levels and price action closely, and always trade at their own risk.

This article was written by Itai Levitan at www.forexlive.com.