E-mini S&P 500 Index (ES) Futures Technical Analysis – Decision Time for Traders at 2889.25

June E-mini S&P 500 Index futures finished higher on Thursday, producing a potentially bullish outside move in the process. After sellers pressed the downside during the pre-market session, the index turned sharply higher in reaction to reports of tanker explosions in the Middle East. This news drove crude oil prices 4% higher, dragging up oil company stocks and the Energy Sector.

On Thursday, June E-mini S&P 500 Index futures settled at 2894.50.

Shares of Disney also helped underpin the broad-based index. Bank shares may have helped limit gains due to expectations of a Federal Reserve rate cut and its potential negative impact on their earnings, but those same expectations have been supportive for most stocks since June 3.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, momentum shifted to the downside on June 11 following the formation of the closing price reversal top at 2911.50 and the subsequent confirmation of the potentially bearish chart pattern.

A trade through 2911.50 will negate the closing price reversal top and signal a resumption of the uptrend. If this creates enough upside momentum then we could see an eventual test of the September 21, 2018 main top at 2961.25.

Taking out 2896.50 will make 2867.25 a new main bottom. If this occurs then a trade through 2867.25 will change the main trend to down.

The minor range is 2911.50 to 2867.25. Its 50% level or pivot at 2889.25 could determine the direction of the index today.

The main range is 2961.25 to 2728.75. Its retracement zone at 2872.50 to 2845.00 is controlling the near-term direction of the index. Holding above this zone is helping to generate an upside bias.

The main range is 2728.75 to 2911.50. If 2867.25 fails as support then look for a potential correction into its retracement zone at 2820.00 to 2798.50.

Daily Swing Chart Technical Forecast

Based on Thursday’s close at 2894.50, the early direction of the index on Friday is likely to be determined by trader reaction to the minor pivot at 2889.25.

Bullish Scenario

A sustained move over 2889.25 will indicate the presence of buyers. If this move creates enough upside momentum then look for the rally to possibly extend into the main top at 2911.50. Taking out this level will indicate the buying is getting stronger. This could trigger a further rally with 2961.25 the next objective.

Bearish Scenario

A sustained move under 2889.25 will signal the presence of sellers. The first downside targets are the Fib level at 2872.50 and the minor bottom at 2867.25.

If 2867.25 fails as support then look for an acceleration to the downside with the 50% level at 2845.00 the next likely target.