E-mini S&P 500 Index (ES) Futures Technical Analysis – Flatlining after Giving Back Earlier Gains

September E-mini S&P 500 Index futures are edging lower at the mid-session after giving back earlier gains. The benchmark index was helped by Friday’s surprisingly strong monthly jobs report that helped ease some recession fears. The resilient labor market also signaled that the economy could withstand more rate hikes from the Federal Reserve.

At 16:26 GMT, September E-mini S&P 500 Index futures are trading 4144.25, down 2.50 or -0.06%. This is down from an intraday high of 4188.00. The S&P 500 Trust ETF (SPY) is at $412.95, down $0.52 or -0.13%.

The catalysts behind the selling pressure are struggles in the semiconductor industry and the shifting focus to a key consumer inflation report due on Wednesday.

In stock related news, the reversal in the index comes as the sell-off for semiconductor stocks deepened throughout the session. Shares of Nvidia were weaker at the start after announcing weak revenue for the second quarter. Currently they are down nearly 9%. This is helping to drag the PHLX Semiconductor Sector Index down by about 2.5%.

Looking ahead to Wednesday’s Consumer Price Index (CPI) report, headline CPI, which includes energy and food, is expected to dip to 8.7% in July, from a 40-year high of 9.1% in June, according to Dow Jones estimates.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart.

A trade through the intraday high at 4188.0 will reestablish the uptrend. A move through 3723.75 will change the main trend to down. This is highly unlikely, but due to the prolonged move down in terms of price and time, the market is ripe for a closing price reversal top. This won’t change the main trend to down, but it could shift momentum to the downside.

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

On the upside, resistance is a pair of long-term 50% levels at 4169.25 and 4250.25.

On the downside, the first support is a minor pivot at 4134.25. The second support is another minor pivot at 4050.50. The key support zone is 3988.50 to 3921.75.

Daily Swing Chart Technical Forecast

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

Bullish Scenario

A sustained move over 4134.25 will indicate the presence of buyers. Overcoming 4169.25 will indicate the buying is getting stronger. This could trigger a surge into the minor top at 4191.00, followed by a main top at 4204.75 and a long-term 50% level at 4250.25.

Bearish Scenario

A sustained move under 4134.25 will signal the presence of sellers. This could trigger a break into a pair of minor bottoms at 4103.75 and 4080.50, followed by a pivot at 4050.50.