Introduction
Since our last analysis, the S&P 500 E-mini Futures (ES) have rebounded sharply, reclaiming support levels and re-entering the ascending channel that has held price action since mid-2024. This bullish reversal shifts the outlook as buyers regain control, but the path to the All-Time High (ATH) at 6,154.75 remains a difficult one to predict. Lets re-look at the technicals.
Developments Since Last Analysis
Reclaiming Key Moving Averages:
- The price has reclaimed the 50-day SMA (5,999) and is trading above the 100-day SMA (5,869.70), which previously was support.
Channel Retest and Bounce:
- After briefly breaking below the ascending channel, the ES has rebounded back into the channel, so buyers are still active, defending the lower boundary.
RSI Momentum Shift:
- The RSI has risen from near oversold levels (below 45) to 52.97.
Support and Resistance Levels
Immediate Resistance:
- 6,050: A key resistance level within the channel that has capped recent attempts to push higher.
- 6,154.75 (ATH): The big resistance.
Immediate Support:
- 5,869.70 (100-day SMA): A secondary support that aligns with the lower boundary of the channel.
- 5,863: The recent low. Price must remain above this for bullish structure to remain.
Probability of Reaching the ATH
The likelihood of retesting and surpassing the ATH at 6,154.75 depends on several factors:
Continued Channel Momentum:
- If the price remains within the ascending channel, there is a 65% probability of reaching the ATH within the next 4–6 weeks, assuming bullish momentum persists.
Macroeconomic Conditions:
- Optimism surrounding fiscal policy, corporate earnings, or lower-than-expected inflation could provide tailwinds to push the ES toward its ATH. Conversely, headwinds like weak economic data or hawkish Federal Reserve commentary could stall this rally.
Technicals Aligning:
- If the ES breaks above 6,050 with strong volume, the probability of reaching the ATH rises to 75%, likely within the next 3–5 weeks.
Rejection Scenario:
- If resistance at 6,050 holds and the ES fails to maintain the 50-day SMA (5,999), the probability of hitting the ATH drops to 40%, with potential downside revisiting the 5,870–5,900 range.
Trade Ideas Moving Forward
High-Probability Bullish Setup:
- Entry: Long positions on a breakout above 6,050 with confirmation from rising RSI and volume.
- Targets:
- First target: 6,100.
- Second target: 6,154.75 (ATH).
- Stop-Loss: Below 5,985 to minimize risk.
High-Probability Bearish Setup:
- Entry: Short positions on a rejection near 6,050, targeting a pullback to the 5,999 (50-day SMA) or lower.
- Targets:
- First target: 5,950.
- Second target: 5,869 (100-day SMA).
- Stop-Loss: Above 6,100 to manage risk.
