ES (March E-mini S&P500 Stock Index Future) Enters an Eventful Week in a Precarious Technical Position

by Mike Paulenoff

January 12, 2025 • 6:50 PM EST

At the close of trading on December 18, 2024, this was my final thought posted to our discussion room at MPTrader.com:

ES (March 2024 E-mini S&P 500)-- Stating the obvious: Today's reaction to the FOMC Rate CUT (!!) inflicted serious near-term technical damage to the dominant, post-August uptrend... Last 5960.75...

Thirty minutes after the close on December 18, 2024, I followed up with this commentary for MPTraders:

My preliminary "conclusion" about today's outsized 3.3% plunge that essentially retraced the entire "Trump Election Rally, argues that unless, by some "miracle," ES manages to recover above 6060 in the upcoming sessions, today's sharp decline will have downside repercussions that project into the 5790-5820 target window (where ES will have corrected 6.5% from the ATH) before my pattern work argues for renewed buying interest within a still dominant bull market setup. That said, if my target window is reasonably accurate, the next rally from the 5800 area had better exhibit bullish form and widespread participation to confirm that the intermediate-term bull run remains intact and dominant. Otherwise, ES will be in the grasp of a MUCH LARGER CORRECTIVE PERIOD entering 2025...

Fast-forward to last Friday's (1/10/25) closing corrective low at 5866 and 9-week intraday low at 5845.25, amounting to a 5.4% correction from the All-Time High at 6181.25 (12/06/24), my parting comment ahead of this weekend was the following:

At today's low of 5884.25, ES has retraced 87% of the Trump election rally from November 4th to December 6th. My pattern work argues that the current downleg has unfinished business that will fully retest the November 4th Low at 5794, with "allowable panicky downside undershoot" of my optimal target window of 5790 to 5820 into the area of the rising 200 DMA (See my attached Daily Chart), now at 5728 before conditions emerge for a potentially sustainable advance... Last is 5861.00... (continued below the chart)...

Join us at MPTrader ASAP to discuss the technical and fundamental setups of the equity and bond markets, as well as individual stocks, macro indices, commodities, precious metals, and Bitcoin, this week when we need to navigate the start of a new earnings season, the next round of consequential inflation data, and January Options Expiration ahead of the advent of a new Trump Administration... It won't be boring! MPTraders will be out in front of many opportunities...

Mike Paulenoff is the author of MPTrader.com, a real-time diary of his technical analysis & trade alerts on ETFs for precious metals, energy, currencies, and an array of equity indices and sectors, including international markets, plus key ETF component stocks in sectors like technology, mining, and banking. Sign up for a Free 7-day Trial!

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