E-mini S&P 500 Index (ES) Futures Technical Analysis – Needs to Close Over 3480.25 to Sustain Rally

September E-mini S&P 500 Index futures hit another record high on Thursday as the Federal Reserve sought to achieve inflation averaging 2% over time in an attempt to lift the U.S. economy out of a deep pandemic-driven recession.

Setting out the central bank’s aggressive new strategy at a virtual Jackson Hole symposium, Fed chief Jerome Powell said it would offset below-2% periods with higher inflation “for some time”, and ensure employment doesn’t fall short of its maximum level.

At 18:03 GMT, September E-mini S&P 500 Index futures are trading 3490.00, up 9.75 or +0.28%.

Eight of the 11 major S&P sectors were trading higher, with economically-sensitive financials leading gains. The communications services index, which houses Google-parent Alphabet Inc and Facebook Inc, fell for the first time in four days.

Daily Swing Chart Technical Analysis

The main trend is up. The main trend was reaffirmed earlier in the session when buyers took out yesterday’s high. The main trend changes to down on a move through 3195.00. This makes the trend safe at this time.

The steep rally has raised some red flags, which means we should start watching for a closing price reversal top. This won’t change the main trend to down, but it could trigger the start of a 2 to 3 day correction.

The minor trend will change to down on a move through 3344.75. This will also shift momentum to the downside.

The divergence between the broad-based index and the communications services sector should be noted because it may be an early sign of selling pressure.

For a look at all of today’s economic events, check out our economic calendar.