E-mini S&P 500 Index (ES) Futures Technical Analysis – Buyers Looking to Extend Overnight Reversal

. June E-mini S&P 500 Index futures are trading higher at the cash market opening on Tuesday as risk appetite showed some signs of picking up again after Monday’s sharp sell-off, but fears over economic growth still weighed on sentiment.

This month’s crushing break in the benchmark index has been fueled by a combination of monetary tightening by major central banks and a slowdown in economic growth.

At 13:30 GMT, June E-mini S&P 500 Index futures are trading 4048.75, up 51.25 or 1.54%. On Monday, the S&P 500 Trust ETF (SPY) settled at $398.23, down $13.11 or -3.19%. Traders are expecting a higher opening based on the futures market performance.

The overnight rebound in the index was likely a technical reaction to the market breaking under the 4000.00 level for the first time since March 2021. Bottom-pickers likely came in as the market hit several oversold oscillator levels on the move.

Investors could also be squaring positions ahead of Wednesday’s key U.S. Consumer Price Index (CPI) report.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, but the market is showing signs of a shift in momentum. A trade through 3961.75 will signal a resumption of the downtrend, while a move through 4303.00 will change the main trend to up.

The minor range is 4303.00 to 3961.75. Its retracement zone at 4132.50 to 4172.75 is the nearest resistance.

The short-term range is 4509.00 to 3961.75. Its 50% level at 4235.50 is additional resistance.

Daily Swing Chart Technical Forecast

The direction of the June E-mini S&P 500 Index on Tuesday is likely to be determined by trader reaction to 3987.50.

Bullish Scenario

A sustained move over 3987.50 will indicate the presence of buyers. If this move generates enough upside momentum, we could see a surge into the minor 50% level at 4132.50. Sellers are likely to come in on the first test of this level. A failure to hold as support, however, is likely to lead to a test of the Fibonacci level at 4172.75.

Bearish Scenario

A sustained move under 3987.50 will signal the presence of sellers. This could trigger a retest of the intraday low at 3961.75. A failure to hold this level could extend the selling into the March 30, 2021 main bottom at 3904.75.