E-mini S&P 500 Index (ES) Futures Technical Analysis – Dragged Down by Weak Technology Sector

September E-mini S&P 500 Index futures are drifting lower on Tuesday, dragged down by a poor performance in the semiconductor and technology sectors after a dismal forecast from Micron Technology. Meanwhile, investors remained cautious about chasing the index higher at current price levels ahead of inflation data that will influence Fed policy and its rate-hike plans.

At 14:42 GMT, September E-mini S&P 500 Index futures are trading 4127.00, down 14.75 or -0.36%. The S&P 500 Trust ETF (SPY) is at $411.78, down $1.21 or -0.29%.

In stock related news, Micron Technology Inc slid 2.4% as the memory-chip maker cut its fourth-quarter revenue forecast and warned of negative free cash flow in the following quarter as demand for chips used in personal computers and smartphones drop.

Looking ahead to Wednesday’s U.S. Consumer Price Index (CPI) report, investors are saying a high print, following last week’s strong jobs numbers, will likely push the Fed to continue with supersized rate hikes and erase some of the recent price gains in the benchmark index.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, the confirmation of yesterday’s closing price reversal top has shifted momentum to the downside.

A trade through 4188.00 will negate the closing price reversal top and signal a resumption of the uptrend. The main trend will change to down on a trade through 3723.75.

The minor trend is also up. A trade through 4103.75 will change the minor trend to down. This will confirm the shift in momentum.

On the upside, resistance is a minor pivot at 4134.25 and a long-term 50% level at 4169.25.

On the downside, the nearest support is a minor pivot at 4050.50.

Daily Swing Chart Technical Forecast

Trader reaction to the pivot at 4134.25 is likely to determine the direction of the September E-mini S&P 500 Index into the close on Tuesday.

Bearish Scenario

A sustained move under 4134.25 will indicate the presence of sellers. This could lead to a labored break with the initial target a pair of minor bottoms at 4103.75 and 4080.50, followed by a minor pivot at 4050.50.

Bullish Scenario

A sustained move over 4134.25 will signal the presence of buyers. If this creates enough upside momentum then look for a surge into the long-term 50% level at 4169.25, followed by a pair of minor tops at 4188.00 and 4191.00. The main top comes in at 4204.75.