E-mini S&P 500 Index (ES) Futures Technical Analysis – Minor Reversal Top Signals Lack of Buyers

June E-mini S&P 500 Index futures are inching lower shortly after the cash market close on Tuesday, giving up earlier gains in the process. The price action suggests traders are looking for a catalyst, but with the major institutional investors sitting on the sidelines ahead of Thursday’s U.S. consumer inflation report, we’re likely to see similar lethargic activity on Wednesday.

At 20:46 GMT, June E-mini S&P 500 Index futures are trading 4223.75, down 1.75 or -0.04%.

Volume was below average for a second day, while the CBOE volatility index, a measure of investor anxiety, touched its lowest level in over a year.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, the late session price action suggests momentum may be getting ready to shift to the downside.

A trade through 4236.75 will signal a resumption of the uptrend. A move through 4165.25 will change the main trend to down.

A lower close will form a potentially bearish closing price reversal top. If confirmed, this could trigger the start of a two to three-day correction.

The minor range is 4165.25 to 4236.75. Its 50% level at 4201.00 is the first downside target.

The second minor range is 4142.50 to 4236.75. Its 50% level at 4189.50 is another potential downside target.

The short-term range is 4055.50 to 4236.75. If the main trend changes to down then look for a break into its retracement zone at 4146.00 to 4124.75.

Daily Swing Chart Technical Forecast

The direction of the June E-mini S&P 500 Index into the close will likely be determined by trader reaction to 4225.50.

Bullish Scenario

A sustained move over 4225.50 will indicate the presence of buyers. If this move creates enough upside momentum then look for a possible retest of 4236.75.

Bearish Scenario

A sustained move under 4225.50 will signal the presence of sellers. This could trigger a labored break into a pair of 50% levels at 4201.00 and 4189.50.

Side Notes

A close under 4225.50 will form a daily closing price reversal top. If confirmed on Wednesday, this could trigger a 2 to 3 day correction that could lead to a change in trend if the selling volume is strong enough.