E-mini S&P 500 Index (ES) Futures Technical Analysis – Down as High Oil Prices, Inflation Concerns Weigh

June E-mini S&P 500 Index futures are down late in the session on Wednesday as higher oil prices deepened worries about global inflation. Nine of the 11 major S&P sectors were trading lower, with economy-sensitive materials and financials falling 1.6% each. Banks shed 1.9%.

Volume is on the light side as investors position themselves ahead of Friday’s consumer price index (CPI) report. A hot reading on inflation would likely spook markets already worried about how the Fed will balance growth and inflation as it withdraws its pandemic-era policy support to the economy.

At 18:56 GMT, the June E-mini S&P 500 Index is trading 4114.00, down 44.75 or -1.08%. The S&P 500 Trust ETF (SPY) is at $411.19, down $4.55 or -1.09%.

On the positive side of the ledger, the energy sector was among the few gainers with a rise of 0.8%, thanks to a jump in Brent crude prices to above $123 a barrel. The sector has soared 66.7% so far this year.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, the chart pattern suggests momentum may be getting ready to shift to the downside.

A trade through 4202.25 will signal a resumption of the uptrend. A move through 3807.50 will change the main trend to down.

The minor trend is also up. A trade through 4071.50 will change the minor trend to down. This will change the momentum.

The market is currently trading on the weak side of a minor pivot at 4136.75. This is followed by the main retracement zone at 4158.25 to 4241.00. This zone stopped the rally at 4202.25 on May 31.

The short-term range is 3807.50 to 4202.25. If the minor trend changes to down then look for the selling to possibly extend into its retracement zone at 4004.75 to 3958.25.

Daily Swing Chart Technical Forecast

Trader reaction to 4136.75 and 4158.25 is likely to determine the direction of the June E-mini S&P 500 Index into the close on Wednesday.

Bearish Scenario

A sustained move under 4136.75 will indicate the presence of sellers. Taking out yesterday’s low at 4076.00 will indicate the selling pressure is getting stronger. This could lead to a test of the minor bottom at 4071.50.

Taking out 4071.50 will change the minor trend to down. If this creates enough downside momentum then look for the selling to extend into 4004.75 to 3958.25.

Bullish Scenario

A sustained move over 4158.25 will indicate the presence of buyers. If this generates enough upside momentum then look for the buying to possibly lead to a test of the main top at 4202.25, followed by the main Fibonacci level at 4241.00.