E-mini S&P 500 Index (ES) Futures Technical Analysis – In Window of Time for Closing Price Reversal Top

The benchmark S&P 500 Index posted a strong rally last week, helped by strong earnings, an easing of geopolitical tensions and a robust performance in energy sector stocks. Softer than expected U.S. consumer inflation data also gave stocks a boost because it lowered the chances of a third rate hike later this year by the Fed.

At 0654 GMT, the June E-mini S&P 500 Index is trading 2736.50, up 7.00 or +0.26%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The trend turned up last week when buyers took out the swing top at 2682.25. It was reaffirmed by the trade through the next swing top at 2718.50.

Today’s session begins with the June E-mini S&P 500 Index up seven days from its last swing bottom. This puts it in the window of time for a potentially bearish closing price reversal top.

The main range is 2883.25 to 2532.50. The index is currently testing its retracement zone at 2707.75 to 2749.25. Trader reaction to this zone will determine the longer-term direction of the index.

The intermediate range is 2807.25 to 2552.00. Its 50% level or pivot is additional support at 2679.50.

Daily Swing Chart Technical Forecast

Based on the early trade, the strength and direction of the index today is likely to be determined by trader reaction to the major Fibonacci level at 2749.25.

Look for a technical bounce on the first test of 2749.25. Overtaking this level, however, could trigger an acceleration to the upside with the next major target coming in at 2807.25.

The inability to overcome 2749.25 and sustained selling pressure, could drive the index back to the major 50% level at 2707.75. Momentum will shift to the downside if this level fails as support.

The earliest sign of weakness today will be a sustained move under Friday’s close at 2729.50. This will put the index in a position to form a daily closing price reversal top.