E-mini S&P 500 Index (ES) Futures Technical Analysis – Downside Momentum Could Fuel Move into 2881.75 to 2873.50

A broad-based U.S. stock index is trading lower early Wednesday as investors continue to digest the impact of a lingering trade war on future earnings. Additionally, another weak performance in emerging markets is leading to some early profit-taking.

At 0617 GMT, September E-mini S&P 500 Index futures are trading 2891.75, down 6.50 or -0.22%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, momentum is trending lower. A trade through 2917.50 will signal a resumption of the uptrend. This will also make 2885.50 a new main bottom.

The minor trend is down. This is controlling the momentum. A trade through 2885.50 will indicate the selling pressure is getting stronger.

The minor range is 2917.50 to 2885.50. Its 50% level or pivot at 2901.50 is controlling the short-term direction of the market.

The intermediate range is 2846.25 to 2917.50. Its retracement zone at 2881.75 to 2873.50 is the next downside target. Since the main trend is up, buyers should show up on the first test of this zone. The index could face another steep plunge if 2873.50 fails as support.

The main range is 2803.00 to 2917.50. Its retracement zone at 2860.25 to 2846.75 is the primary downside target. Once against buyers should show up on a test of this zone. This area has to hold as support or aggressive selling pressure could eventually challenge the main trend.

Daily Swing Chart Technical Forecast

Based on yesterday’s close at 2898.25 and the early price action, the direction of the September E-mini S&P 500 Index on Wednesday is likely to be determined by trader reaction to the pivot at 2901.50.

A sustained move under 2901.50 will indicate the presence of sellers. If this move creates enough downside momentum then look for the selling to extend into 2885.50.

If 2885.50 fails as support then look for a further break into 2881.75. This is a potential trigger point for a further break into 2873.50. Watch for an acceleration to the downside if 2873.50 fails with the next major target zone coming in at 2860.25 to 2846.75.

Overcoming and sustaining a move over 2901.50 will signal the return of buyers. If this rally creates enough upside momentum then look for the rally to possibly extend into the minor top at 2912.50 and the main top at 2917.50.