E-mini S&P 500 Index (ES) Futures Technical Analysis – Bulls Hoping Consumer Inflation has Peaked

September E-mini S&P 500 Index futures are trading slightly higher in Friday’s pre-market session as traders await the release of a highly anticipated U.S. consumer inflation report.

If the data meets expectations, or shows slower gains, then benchmark index traders could take it as a sign that inflation may have peaked and that the Federal Reserve may need to be less aggressive later in the year. This would be bullish for stocks.

At 07:04 GMT, the September E-mini S&P 500 Index is trading 4025.25, up 7.75 or +0.19%. On Thursday, the S&P 500 Trust ETF (SPY) settled at $401.46, down $9.76 or -2.37%.

The May consumer price index report will be released at 12:30 GMT, shortly before the cash market opening. Economists surveyed by Dow Jones are expecting year over year increases of 8.3% for the main index and 5.9% for the core index, which excludes food and energy prices.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, momentum has been trending lower since May 31. A move through 4204.75 will signal a resumption of the uptrend. Taking out 3810.00 will change the main trend to down.

The minor trend is down. This confirms the shift in momentum. A trade through 4191.00 will change the minor trend to up.

The short-term range is 3810.00 to 4204.75. Its retracement zone at 4007.25 to 3960.75 is the primary target area.

Daily Swing Chart Technical Forecast

Trader reaction to the 50% level at 4007.25 is likely to determine the direction of the September E-mini S&P 500 Index on Friday.

Bullish Scenario

A sustained move over 4007.25 will indicate the presence of buyers. If this move creates enough upside momentum then look for an intraday rally with 4109.50 the near-term target.

Bearish Scenario

A sustained move under 4007.25 will signal the presence of sellers. This could extend the selling into the Fibonacci level at 3960.75. This is a potential trigger point for an acceleration to the downside.

Side Notes

The key area to watch on Friday is the retracement zone at 4007.25 to 3960.75. Since the main trend is up, buyers could come in on a test of this area. They are going to try to form a potentially bullish secondary higher bottom.