E-mini S&P 500 Index (ES) Futures Technical Analysis – Light Volume Relief Rally Ahead of Holiday Weekend

September E-mini S&P 500 Index futures are trading higher shortly after the cash market close on Friday. The volume is well-below average with the move attributed mostly to position-squaring ahead of the long U.S. holiday weekend.

The market is closed on Monday for U.S. Independence Day but after that it’s a short week before next Friday’s June Non-Farm Payrolls report. The results of this report will carry a lot of weight when the Federal Reserve meets to decide monetary policy on July 26-27. Investors will also have the opportunity to react to second-quarter earnings season, which begins around July 15.

At 20:20 GMT, September E-mini S&P 500 Index futures are trading 3826.00, up 36.50 or +0.96%. The S&P 500 Trust ETF settled at $381.20, up $3.95 or +1.05%.

In economic news, today’s ISM Manufacturing PMI report showed a deceleration in both new orders and input prices. The report seemed to back the view that the economy is cooling and inflation appears to be past its peak.

In stock related news, department store chain Kohl’s Corp shares tumbled following its decision to halt talks of a possible sale to Franchise Group.

Short-Term Outlook

Trader reaction to the short-term 50% level at 3794.50 is likely to determine the direction of the September E-mini S&P 500 Index into the close on Friday.

Bullish Scenario

A sustained move over 3794.50 will indicate the presence of buyers. If this move generates enough upside momentum then look for a surge into the minor pivot zone at 3845.75 to 3870.25.

Bearish Scenario

A sustained move under 3794.50 will signal the presence of sellers. This could trigger a break into the short-term Fibonacci level at 3757.75, followed by the minor bottom at 3741.25.

Taking out 3741.25 will reaffirm the minor downtrend. This could trigger the start of an acceleration into the nearest main bottom at 3639.00.