E-mini S&P 500 Index (ES) Futures Technical Analysis – May 8, 2017 Forecast

June E-mini S&P 500 Index futures are expected to open lower based on the pre-market trade. The index rallied shortly after the opening, but the buying quickly dried up and the index turned lower. So far, it looks like a classic case of “buy the rumor, sell the fact” in reaction to the French presidential election outcome. Investors used the end of the election as an excuse to book profits.

Earnings season is also over, the Fed issued their statement and the government reported jobs data on Friday. Investors have nothing to look forward to until Friday’s consumer inflation and retail sales reports. So they may decide to poke around on the downside for a couple of days while looking for value.

Technical Analysis

The main trend is up according to the daily swing chart. During the pre-market session, the index popped to 2403.75 before turning lower. The move suggests that short-covering rather than new buying drove the market higher. Anyone who bought strength earlier is trapped if they didn’t get out in time. If sellers continue to press the market lower, then the trapped sellers may decide to pay anything to get out. This could cause a spike to the downside.

The short-term range is 2375.50 to 2403.75. The first target is its pivot at 2389.50.

The main range is 2322.75 to 2403.75. If there is a sell-off then look for a possible correction into 2363.25 to 2353.50.

Forecast

Based on the current price at 2394.00, the direction of the market today is likely to be determined by investor reaction to the short-term pivot at 2389.50.

A sustained move over 2389.50 will indicate the presence of buyers. This could generate enough upside momentum to overcome the former top at 2397.25 then the intraday high at 2403.75.

A sustained move under 2389.50 will signal the presence of sellers. The first target is an uptrending angle at 2382.75. Look for a technical bounce on the first test of this angle. If it fails then we could see an acceleration into the main bottom at 2375.50. A trade through this price will turn the main trend to down.

Also watch for a potentially bearish closing price reversal top chart pattern. This could trigger the start of a 2 to 3 day correction.