E-mini S&P 500 Index (ES) Futures Technical Analysis – Momentum Shifts to Upside if Buyers Can Overcome 2637.50

June E-mini S&P 500 Index futures settled lower on Friday and for the week after sellers drove the index through several retracement levels and a main bottom in reaction to a steep sell-off in shares of Facebook stock, an interest rate hike by the Fed and fears of a trade war with China. The close near the low for the day and week suggests the downside momentum will continue early this week.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 2586.00 will signal a resumption of the downtrend. If this creates enough downside momentum, we could see a test of the February 6 main bottom at 2532.50.

The index is in no position to change the main trend to up, but it is down eight sessions from the main top at 2807.25, putting it in the window of time for a closing price reversal bottom. Typically, after a steep sell-off in terms of price and time, the index tends to post a reversal bottom when it gets short-term oversold.

The short-term range is 2532.50 to 2807.25. Its retracement zone at 2637.50 to 2670.00 is the first resistance zone.

The main range is 2883.25 to 2532.50. If there is a move through 2670.00 then its retracement zone at 2708.00 to 2749.25 will become the primary upside target.

Daily Swing Chart Technical Forecast

Based on Friday’s close at 2597.75 and the downside momentum into the close, the direction of the index on Monday is likely to be determined by trader reaction to last week’s low at 2586.00.

A sustained move under 2586.00 will signal a resumption of the downtrend. This move could generate the downside momentum needed to drive the index into the February 6 bottom at 2532.50.

Holding above 2586.00 will indicate the presence of buyers. If this move creates enough upside momentum, we could see a rally back to 2637.50. Overcoming the main bottom at 2651.75 and the short-term 50% level at 2670.00 will indicate the buying is getting stronger.