E-mini S&P 500 Index (ES) Futures Technical Analysis – April 4, 2018 Forecast

June E-mini S&P 500 Index futures are trading sharply lower during the pre-market session. Investors are reacting to the possibility of an escalation of a trade war between the United States and China after the former announced new tariffs on 106 U.S. products, including soy, cars and chemicals.

Weekly Technical Analysis

The main trend is down according to the weekly swing chart. A trade through 2532.50 will reaffirm the downtrend. This could trigger the start of a steep drop since the next main bottom doesn’t come in until 2420.50.

The main range is 2321.00 to 2883.25. Its retracement zone at 2602.25 to 2535.75 is currently being tested. This zone is controlling the longer-term direction of the index. Overtaking 2602.25 will indicate that the buying is greater than the selling at current price levels.

Taking out 2535.75 will signal that the selling is getting stronger.

Weekly Technical Forecast

Based on the early price action, the direction of the index the rest of the session is likely to be determined by trader reaction to a short-term uptrending Gann angle at 2564.50.

Holding above 2564.50 will indicate that buyers are coming in to support the index on the break. This could drive the index back into a resistance cluster at 2596.50, 2602.25 and 2615.25. Since the main trend is down, we’re likely to see sellers on the first test of this area. Overtaking 2615.25 will indicate the buying is getting stronger.

A sustained move under 2564.50 will signal that the selling is getting stronger. This could trigger a break into the very important 2535.75 to 2532.50 area. Another downside target is a long-term weekly uptrending Gann angle at 2525.00.

The angle at 2525.00 is the trigger point for a steep sell-off. If selling pressure increases on this move, we could see a break into 2423.00 to 2420.50 over the near-term.