E-mini S&P 500 Index (ES) Futures Technical Analysis – Early Buyers Defending 4021.50 Main Bottom

June E-mini S&P 500 Index futures are trading lower shortly before the cash opening on Monday. After a volatile session on Friday in which the benchmark index sold off sharply as another rise in long-dated U.S. Treasury yields unnerved investors, markets were set for a rocky start to the week.

Today’s selling pressure is not only being fueled by worries about higher interest rates, but also a tightened lockdown in Shanghai which deepened investors’ fears that the global economy is rapidly heading for a slowdown.

At 13:02 GMT, June E-mini S&P 500 Index futures are trading 4053.75, down 65.75 or -1.60%. On Friday, the S&P 500 Trust ETF (SPY) settled at $411.40, down $2.41 or -0.58%.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. Reaffirming the downtrend earlier in the session was the failure to hold the previous main bottom at 4506.00. This has put the index in a position to challenge the May 12, 2021 main bottom at 4021.50. Meanwhile, a trade through 4303.00 will change the main trend to up.

The first minor range is 4303.00 to 4031.00. Its pivot at 4167.00 is the nearest upside target and potential resistance. This level will move lower if 4031.00 fails to hold.

The second potential resistance level is the pivot at 4270.00.

Daily Swing Chart Technical Forecast

The direction of the June E-mini S&P 500 Index on Monday is likely to be determined by trader reaction to 4119.50.

Bearish Scenario

A sustained move under 4119.50 will indicate the presence of sellers. If this move creates enough downside momentum then look for a retest of the intraday low at 4031.00. This is followed closely by the May 12, 2021 main bottom at 4021.50.

Taking out 4021.50 will put the index in a bearish position. If the selling pressure is strong enough, we could see an acceleration into the March 30, 2021 main bottom at 3904.75.

Bullish Scenario

A sustained move over 4119.50 will signal the presence of buyers. This could trigger an acceleration into the first minor pivot at 4167.00.

Side Notes

Following a prolonged move down in terms of price and time, a close over 4119.50 will form a potentially bullish closing price reversal top. If confirmed, this could trigger the start of a minimum two-day counter-trend rally.