E-mini S&P 500 Index (ES) Futures Technical Analysis – Grinding Rally Ripe for Closing Price Reversal Top

September E-mini S&P 500 Index futures finished higher on Wednesday after inflation jumped, but not by quite as much as investors feared when stripping out volatile food and energy prices.

July’s Consumer Price Index (CPI) released Wednesday showed prices jumped 5.4% since last year, compared to expectations of 5.3%, according to economists surveyed by Dow Jones. The government said CPI increased 0.5% in July on month-to-month basis.

On Wednesday, September E-mini S&P 500 Index futures settled at 4440.50, up 10.50 or +0.24%.

The market moving news was the core rate of inflation, which could signal inflation will remain tempered and the economy will remain strong. CPI, excluding energy and food prices, rose by 0.3% last month, below the 0.4% increase expected. Core prices still jumped 4.3% on a year-over-year basis.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 4443.25 will reaffirm the uptrend. A move through 4224.00 will change the main trend to down.

The minor trend is also up. A trade through 4412.25 will change the minor trend to down. This will also shift momentum to the downside.

The minor range is 4364.75 to 4443.25. Its 50% level or pivot at 4404.00 is the nearest support.

The short-term range is 4224.00 to 4443.25. If the minor trend changes to down then look for a pullback into its retracement zone at 4333.50 to 4307.75.

Daily Swing Chart Technical Forecast

The direction of the September E-mini S&P 500 Index early Thursday will be determined by trader reaction to the pivot at 4404.00.

Bullish Scenario

A sustained move over 4404.00 will indicate the presence of buyers. Taking out 4443.25 will indicate the buying is getting stronger. This could trigger an acceleration to the upside if the buying volume is strong enough.

Bearish Scenario

A sustained move under 4404.00 will signal the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into the minor bottom at 4364.75, followed by the short-term retracement zone at 4333.50 to 4307.75.