E-mini S&P 500 Index (ES) Futures Technical Analysis – Needs to Hold 4475.50 to Sustain Upside Momentum

September E-mini S&P 500 Index futures are trading slightly higher on the cash market opening after giving back most of its overnight gains. The market is being underpinned as a full U.S. approval of a COVID-19 vaccine boosted shares of energy and travel-related companies.

The early price action suggests that despite the potentially bullish news, investors are a little concerned about valuations and the Fed’s stance on an earlier than expected tapering.

At 13:36 GMT, September E-mini S&P 500 Index futures are trading 4478.75, up 3.25 or +0.07%.

Yesterday’s upside momentum extended early Tuesday as oil majors Chevron Corp and ExxonMobil Corp added about 1% each. Shares of major Wall Street banks also edged higher.

Cruise operators including Carnival Corp rose about 1%, while online travel agency TripAdvisor and casino companies MGM Resorts, Wynn Resorts added between 1.4% and 2.8% on hopes that the approval would increase vaccination rates in the United States and spark a stronger rebound in travel and leisure activities.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through the intraday high of 4492.00 will signal a resumption of the uptrend. A move through 4347.25 will change the main trend to down.

The new minor range is 4347.75 to 4492.00. Its retracement zone at 4419.75 to 4402.75 is the nearest support. Since the main trend is up, buyers are likely to come in on a pullback into this area.

Daily Swing Chart Technical Forecast

The direction of the September E-mini S&P 500 Index on Tuesday is likely to be determined by trader reaction to 4475.50.

Bullish Scenario

A sustained move over 4475.50 will indicate the presence of buyers. Taking out the intraday high at 4492.00 will indicate the buying is getting stronger and could trigger an acceleration to the upside if the volume is strong enough.

Bearish Scenario

A sustained move under 4475.50 will signal the presence of sellers. If this move is able to generate enough downside momentum, we could see a near-term correction into the minor retracement zone at 4419.75 to 4402.75.

Side Notes

A close under 4475.50 will form a potentially bearish closing price reversal top. If confirmed, this could lead to a 2 to 3 day correction, but not necessarily a change in trend.