E-mini S&P 500 Index (ES) Futures Technical Analysis – May 28, 2019 Forecast

June E-mini S&P 500 Index futures are edging lower at the mid-session after giving back earlier gains. Gains were limited by tensions over a potential prolonged trade dispute between the United States and China, but supported because there was no escalation of the dispute over the long holiday weekend.

The rally was also supported by a strong recovery in technology shares which were beat up recently due to a new technology war between the U.S. and telecom giant Hauwei. However, helping to cap prices was a comment from President Trump that suggested conditions were worsening. Trump said Monday the U.S. was “not ready” to make a deal with China, before adding he expected one in the future. Trump also said tariffs on Chinese imports could go up “substantially.”

At 15:41 GMT, June E-mini S&P 500 Index futures are trading 2829.00, down 2.75 or -0.08%.

Daily Technical Analysis

The main trend is down according to the daily swing chart. A trade through 2799.75 will signal a resumption of the downtrend. The main trend will change to up on a move through 2894.00.

The index is also posting an inside move for a second session, suggesting investor indecision and impending volatility.

The index is trading inside a major retracement zone bounded by a 50% level at 2844.00 and a Fibonacci level at 2816.00. This zone is controlling the longer-term direction of the index.

The short-term range is 2894.00 to 2805.75. Its retracement zone at 2850.00 to 2860.25 is the next upside target and potential resistance.

The main range is 2961.25 to 2799.75. Its retracement zone is also resistance. It stopped the rally at 2894.00 on May 16.

The short-term retracement zone is resistance because sellers are going to continue to try to form secondary lower tops as the market moves lower.

Daily Technical Forecast

Based on the early price action, the direction of the June E-mini S&P 500 Index into the close is likely to be determined by trader reaction to the downtrending Gann angle at 2830.00.

Bullish Scenario

A sustained move over 2830.00 will indicate the presence of buyers. This could trigger a rally into a pair of 50% levels at 2844.00 and 2850.00. The latter is a potential trigger point for an acceleration into a resistance cluster at 2860.25 to 2862.00.

Bearish Scenario

A sustained move under 2830.00 will signal the presence of sellers. The next target is the major Fibonacci level at 2816.00. Crossing to the weak side of a downtrending Gann angle at 2809.25 will put the index in a bearish position.