E-mini S&P 500 Index (ES) Futures Technical Analysis – July 13, 2017 Forecast

September E-mini S&P 500 Index futures are trading slightly higher after the opening as investors prepare for a second day of testimony from Fed Chair Janet Yellen. Yesterday, she ignited a rally after she came across as dovish in her assessment of the number of future rate hikes while raising concerns about the muted inflation levels.

On Friday, investors will be watching and reacting to the release of second quarter earnings reports from several major banks and monthly consumer inflation. These could be market moving events especially the inflation figure.

Technical Analysis

The main trend is down according to the daily swing chart, but momentum has shifted to the upside. The trend will turn up on a trade through 2451.50.

Forecast

Momentum shifted to up on Wednesday when the mostly rangebound index crossed to the bullish side of a short-term retracement zone at 2432.75 to 2426.75.

Look for the bullish bias to continue as long as the index remains above this zone. A bearish bias will begin to develop if this area fails as support.

Volume is thin because its vacation time in the U.S. so moves can be exaggerated. It doesn’t take much to move a market in either direction. Based on this assessment, I think investors overreacted to Yellen’s comments on Wednesday and could very easily come back to the retracement zone if she tries to talk down inflation concerns today.