E-mini S&P 500 Index (ES) Futures Technical Analysis – May 29, 2018 Forecast

June E-mini S&P 500 Index futures are trading sharply lower in reaction to political turmoil in Italy and a massive sell-off in its bond market. Problems in Spain are also adding to investor concerns. The Euro also fell to its lowest level against the U.S. Dollar since November 2017.

Turbulence in European stock markets is also contributing to the U.S. weakness. The Stoxx Europe 600 fell 1.2 percent overnight. Italy’s FTSE MIB fell 2.1 percent and Spain’s IBEX 35 declined 2.2 percent.

Daily Technical Analysis

The main trend is up according to the daily swing chart, however, momentum has been trending lower since the closing price reversal top at 2741.75 on May 22.

The minor trend is down. This is also fueling the shift in momentum to down.

The main range is 2591.25 to 2741.75. Its retracement zone at 2666.50 to 2648.75 is the primary downside target. Since the main trend is up, we could see a technical bounce on the first test of this zone.

Inside the retracement zone is an uptrending Gann angle at 2663.25. This makes it a valid downside target also.

Daily Technical Forecast

Today’s trading session will be all about momentum. Since the move through 2700.50 earlier today reaffirmed the downside momentum, we’re going to use this level as our pivot.

A sustained move under 2700.50 will indicate the presence of sellers. If the downside pressure continues then look for the selling to extend into the support cluster formed by the 50% level at 2666.50 and the uptrending Gann angle at 2663.25.

Watch for a technical bounce on the first test of 2666.50 to 2663.25. If this area fails then the selling is likely to extend into the Fib level at 2648.75.

Overtaking and sustaining a move over 2700.50 could fuel an intraday retracement into the nearest downtrending Gann angle at 2721.75.

Watch the price action and read the order flow at 2700.50 all session. Trader reaction to this level will tell us if the selling is getting stronger, or if buyers have returned.