E-mini S&P 500 Index (ES) Futures Technical Analysis – Getting Close to Testing Major Retracement Zone

If the downside momentum continues on the weekly chart then look for an early test of 2716.00. Trader reaction to this level will then determine the direction of the index the rest of the week.
James Hyerczyk
E-mini S&P 500 Index

June E-mini S&P 500 Index futures are expected to open lower this week given the weak close on Friday. There were no major fundamental developments over the weekend, but a few minor moves. China issued a white paper that blamed the U.S. from blowing up the trade negotiations, and Mexico is planning to send a delegation to Washington to discuss it migration reform in an effort to prevent President Trump from imposing a 5% tariff on Mexican imports on June 10.

Last week, June E-mini S&P 500 Index futures settled at 2752.50, down 79.25 or -2.88%.

Weekly June E-mini S&P 500 Index

Weekly Technical Analysis

The main trend is up according to the weekly swing chart. However, momentum is trending lower. A trade through 2961.25 will signal a resumption of the uptrend, while a trade through 2319.25 will change the main trend to down.

The minor trend is down. This is controlling the downside bias in momentum. Taking out 2726.50 will reaffirm the minor trend.

The main range is 2916.25 to 2319.25. This creates potential downside targets at 2716.00, 2640.25 and 2564.50. The most important being the 50% level at 2640.25. Since the main trend is up, we could start to see value-seeking buyers step in on a test of this wide range and especially 2640.25.

Weekly Technical Forecast

If the downside momentum continues on the weekly chart then look for an early test of 2716.00. Trader reaction to this level will then determine the direction of the index the rest of the week.

Bearish Scenario

A sustained move under 2716.00 will indicate the selling is getting stronger. The first target is an uptrending Gann angle at 2687.25. Watch for a technical bounce on the first test of this angle.

If 2687.25 fails then this will indicate the selling pressure is getting stronger with the 50% level at 2640.25 the next likely downside target. Once again, look for buyers on a test of this level.

Crossing to the weak side of 2640.25 will indicate still stronger selling pressure than could drive the index into 2564.50.

Bullish Scenario

A sustained move over 2716.00 will signal the presence of buyers. If this creates enough upside momentum then look for a drive into a steep downtrending Gann angle at 2801.25. This angle, moving down at a rate of 32 points per week since the 2961.25 top, has been guiding the index lower for five weeks. Look for sellers on the first test of the angle.

Look for the buying to possibly accelerate if the index crosses to the strong side of the angle at 2801.25.

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