E-mini S&P 500 Index (ES) Futures Technical Analysis – July 2, 2018 Forecast

September E-mini S&P 500 Index futures are trading lower shortly before the cash market opening. The selling pressure is being driven by the shedding of risky assets tied to escalating trade tensions.

At 1025 GMT, September E-mini S&P 500 Index futures are trading 2703.50, down 18.00 or -0.66%.

Daily Technical Analysis

The main trend is up according to the daily swing chart. However, momentum is trending higher. A trade through 2679.25 will change the main trend to down.

Last Thursday’s closing price reversal bottom and subsequent follow-through rally on Friday shifted momentum to the upside. A trade through 2693.25 will negate the chart pattern and signal a resumption of the downtrend.

The minor trend is also down. A trade through 2745.50 will change the minor trend to up. This will also confirm the shift in momentum.

The main range is 2595.75 to 2796.00. Its retracement zone at 2695.75 to 2672.25 is potential support. It stopped the selling last week at 2693.25 and on May 29 at 2679.25. This retracement zone is essentially controlling the near-term direction of the index.

Daily Technical Forecast

Based on the early trade, the direction of the September E-mini S&P 500 Index is likely to be determined by trader reaction to the 50% level at 2695.75.

Holding 2695.75 will indicate that buyers are coming in to defend the trend and last week’s minor bottom at 2693.25 and the main bottom at 2679.25.

If this move is able to gain traction then we could see a rally back to the downtrending Gann angle at 2744.00. This angle has been guiding the market lower for 13 sessions so overtaking it will likely trigger a bullish surge.

A sustained move under the 50% level at 2695.75 will signal increasing selling pressure. This is likely to lead to a quick test of the minor bottom at 2693.25 and a downtrending Gann angle at 2692.00

Crossing to the weak side of the angle at 2792.00 will indicate the selling pressure is getting stronger. This could lead to a challenge of the main bottom at 2769.25, followed by the uptrending Gann angle at 2677.75.

We could see a technical bounce on the first test of 2677.75, but if it fails then look for the selling to extend into 2672.25.

The Fibonacci level at 2672.25 is very important because it is the trigger point for an acceleration to the downside. The next main bottom under this level is 2595.75.