E-mini S&P 500 Index (ES) Futures Technical Analysis – Grinding Toward 3131.00

June E-mini S&P 500 Index futures are trading higher for a third session this week on Wednesday and the fourth in a row. The risk-on tone is being fueled by optimism over the recovery from coronavirus-led shutdowns. The catalysts behind the moves are better-than-expected U.S. economic reports.

ADP and Moody’s Analytics reported private payrolls fell by another 2.76 million in May. The ADP number was far less than the 8.75 million estimate. The reason for the wide disparity was not immediately clear, CNBC reported.

At 14:38 GMT, June E-mini S&P 500 Index futures are at 3107.00, up 30.00 or +0.97%.

In other news, data from the Institute for Supply Management showed the U.S. services sector contracted less than expected, rebounding from an 11-year trough.

Traders continue to be primarily focused on the recovery of the U.S. and global economies. Stocks poised to benefit from the economy reopening rose broadly on Wednesday. American Airlines, Delta and United Airlines all gained more than 2%. JPMorgan Chase, Wells Fargo and Bank of America also climbed at least 2.9% each.

Meanwhile, shares of companies that surged during stricter stay-at-home orders lagged. Amazon dipped 0.1% and Netflix slid 0.9%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was reaffirmed on Wednesday when buyers took out yesterday’s high. A trade through 2903.75 will change the main trend to down.

The minor trend is also up. A move through 2992.00 will change the minor trend to down. This will also shift momentum to the downside.

The main range is 3397.75 to 2174.00. Its retracement zone at 2930.25 to 2785.75 is controlling the longer-term direction of the index. This zone is also support.

Daily Swing Chart Technical Forecast

The direction of the June E-mini S&P 500 Index the rest of the session on Wednesday is likely to be determined by trader reaction to 3077.00.

Bullish Scenario

A sustained move over 3077.00 will indicate the presence of buyers. If this move is able to generate enough upside momentum then look for the rally to possibly extend into the March 3 main top t 3131.00.

Bearish Scenario

A sustained move under 3077.00 will put the index in a position to form a potentially bearish closing price reversal top. If confirmed, this could trigger the start of a 2 to 3 day correction with the potential targets lined up at 2992.00, 2930.25 and 2903.75.