ES March 2023 Contract Analysis

12 lut 2023

See my previous posts on this instrument for further background.

I need only to post this very simple Weekly chart for ESH2023 to support my view that the S&P 500 has made a trend reversal and is now recovering from the year long downtrend that started in January 2022.

Main Points

• The index has broken the very solid down trend line that started in January 2022 and is firmly above it now.
  If we apply the Ichimoku cloud to the daily chart the index is well clear of it now, a bullish indication although the cloud on the weekly chart indicates some choppiness in the short term.
  The index has also broken through the 55 Week Moving Average and pulled back to it this week but held above it. The 55 Week MA line is on the chart, this should form an area of support going forward and is historically often an important area of support / resistance.
  It appears that a 7 month Reverse Head and Shoulders Pattern is emerging. The target of the H&S is around the 4700 area. I've marked the possible H&S formation on the chart
  For Elliot fans we can see that the index could be at the beginning of a Wave 3 up starting at the December 22 low having previously completed Wave one up from October low and Wave 2 down from 1st December high.
  

Short Term Outlook

An upward trendline and possible channel has formed since January 2023. The Index bounced up from the bottom of that and the 55 Week MA at around the 4060 area last week. We should see continued upward momentum from there this week.
Support lies at the 4060 area

Longer Term Outlook


The next point of resistance is most likely the August 2022 High at 4327 - Target for end of February
After a brief pullback from the August 2022 high the index will likely head towards 4479 the 1.272 Fib extension from the October low and 4631 the March 2022 High - Target for end of March
The target of the currently active 7 month H&S pattern is in the 4700 area and the 1.618 Fib extension from the October low is 4662 - Target for end of June
The current phase in the economic cycle is usually bullish eg. Year 3 of the US Presidential cycle - 2 year forecast


About me - I'm a qualified Technical Analyst, a member of The Society of Technical Analysts in London and ,I trade my own capital part time. ES1 / SPX is my most traded instrument and I've been trading it for over 20 years. If you find my analysis useful please do hit the like and follow buttons. Comments, questions and feedback most welcome.

As a member of the Society of Technical Analysts I am providing market analysis only and NOT financial advice of any kind.