E-mini S&P 500 Index (ES) Futures Technical Analysis – Light Selling Ahead of CPI Data, Earnings Season

September E-mini S&P 500 Index futures are trading lower late in the session on Monday as investors positioned themselves ahead of Wednesday’s U.S. Consumer Price Index (CPI) report and the official start to the second-quarter earnings season. Additionally, investors shed risk throughout the session after China ordered the shutdown of Macao’s first casino in over two years to curb the spread of COVID-19.

At 17:55 GMT, September E-mini S&P 500 Index futures are trading 3882.00, down 19.25 or -0.49%. The S&P 500 Trust ETF (SPY) is at $384.09, down $4.58 or -1.18%.

Of the 11 major sectors in the S&P 500, communication services were suffering the biggest percentage drop, while utilities led to gainers.

On Wednesday, the Consumer Price Index (CPI) is expected to rise to 8.8% from 8.6% in last month’s read. Results from big banks, including JPMorgan Chase & Co, Citigroup Inc, and Wells Fargo & Co, are expected to launch second-quarter reporting season later in the week.

Short-Term Outlook

Trader reaction to a short-term retracement zone at 3845.50 to 3870.25 is likely to determine the direction of the September E-mini S&P 500 Index into the close on Monday.

Bullish Scenario

A sustained move over 3870.25 will indicate the presence of buyers. If this creates enough late session momentum then look for a surge into the resistance cluster at 3922.00.

A trade though 3922.00 will indicate the buying is getting stronger with the main top at 3950.00 the next likely target. Taking out this level will change the minor trend to up.

Bearish Scenario

A sustained move under 3845.50 will signal the presence of sellers. This could trigger an acceleration into another short-term retracement zone at 3794.50 to 3757.75. This is the last potential support before the main bottom at 3741.25. A trade through this level will reaffirm the downtrend.