E-mini S&P 500 Index (ES) Futures Technical Analysis – In Position to Post Closing Price Reversal Top

June E-mini S&P 500 Index futures are trading mixed shortly after the cash market opening after posting its best week in six, as investors prepared for the Federal Reserve’s meeting this week amid caution over rising borrowing costs spurred by massive fiscal debt.

The S&P 500 notched a record high for the first time in nearly a month last week as approval of one of the largest fiscal stimulus packages in U.S. history and vaccine rollouts fueled demand for economy-linked stocks such as banks, energy, materials at the cost of tech names with lofty valuations.

At 13:43 GMT, June E-mini S&P 500 Index futures are trading 3931.25, down 1.50 or -0.04%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 3949.00 will signal a resumption of the uptrend. Today’s early high at 3947.75 stopped just short of this level.

A trade through 3710.50 will change the main trend to down. This is highly unlikely, but the current seven day rally has put the index inside the window of time for a potentially bearish closing price reversal top.

The minor range is 3710.50 to 3949.00. Its 50% level at 3829.75 is the nearest support.

The main range is 3648.00 to 3949.00. Its retracement zone at 3798.50 to 3763.00 is another potential support area. It’s controlling the near-term direction of the index.

Daily Swing Chart Technical Forecast

The direction of the June E-mini S&P 500 Index into the close on Monday will be determined by trader reaction to 3932.75.

Bullish Scenario

A sustained move over 3932.75 will indicate the presence of buyers. The first upside target is 3949.00. Taking out this level could trigger an acceleration to the upside.

Bearish Scenario

A sustained move under 3932.75 will signal the presence of sellers.

Taking out 3949.00 then turning lower for the session will put the index in a position to form a potentially bearish closing price reversal top. This could trigger the start of a 2 to 3 day correction with 3829.75 the next potential downside target.