Monthly ES Futures Outlook – December

Happy Thanksgiving!

This is the second post in my series of monthly outlooks for ES futures. The first one, published in mid-October, covered the remainder of October and the outlook for November.
Since the end of October, price had been moving inside a downward-expanding falling wedge channel. On Friday, 28 November, ES finally broke out with a strong bullish daily close above the structure—although on lower volume due to the Thanksgiving week.
From here, two primary scenarios can unfold:
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Scenario 1: Bullish Continuation Toward 6895+
Price remains bullish by successfully retesting the 4-hour 200 SMA (~6780) and advancing toward the next major supply zone around 6895. A few confluences support this scenario:
• The 200 SMA aligns with the 23.6% Fibonacci retracement from the 21 November low to the current swing high.
• This area also overlaps with the zone where the 10 October sell-off originated.
If this zone holds on the retest, ES could potentially push to new all-time highs by month-end, with intermediate upside targets at:
• 6894
• 6953
• 7000
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Scenario 2: Rejection From 6890s Supply Zone
Price fails to break through the 6890s supply, rejects sharply, and continues lower—forming a third lower high below 6900.
Key downside levels under this scenario include:
• 6760
• 6674
• 6614
The major demand zone to watch is 6432 (the 7.5% correction level), which served as a strong bounce area multiple times in August and September.
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Probability Tilt: Slight Edge to Scenario 1
From a probability standpoint, Scenario 1 currently has a slightly higher chance of playing out. Reasons:
• Price is trading above all three short-term EMAs: 9, 21, and 50.
• The 9 EMA is about to cross above the 21 EMA, a setup that historically leads more often to sideways consolidation followed by continuation to the upside, rather than a breakdown.
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Institutional Buying Zones: Impact of % Corrections

When ES hits a new ATH and begins to retrace, certain correction percentages tend to attract institutional bids. These are typically:
• 5%
• 7.5%
• 10%
The current ATH is 6953.75, giving the following key correction levels:
• 5% correction: 6606
• 7.5% correction: 6432
• 10% correction: 6258
Recent examples support this pattern:
• The latest ATH (30 October) saw a 5% correction on 18 November, which led to a rally to 6790—about a 190-point bounce before the 20 November sell-off.
• The August 2024 low was roughly a 10% pullback from that era’s ATH.
• The December 2024 sell-off following the Fed meeting was roughly a 5% correction.
If Scenario 2 plays out, I will be watching 6432 very closely, given the confluence of the 7.5% correction and a historically strong demand zone.
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ATR & Volatility Outlook:

For the past 9 consecutive weeks, the weekly ATR has exceeded 200 points, meaning ES has moved 200+ points on average per week.
Given that price rallied 300+ points from the 21 November low of 6525 within a single week, a period of consolidation next week is likely.
Volatility should return during the second week of December due to:
• FOMC interest rate decision — 10 December
• CPI data — 11 December
Given this macro calendar, I expect either a new ATH or a move toward 6674 within the next two weeks.

Hope this analysis helps. Open to feedback, discussion, and improvements. Happy trading.