E-mini S&P 500 Index (ES) Futures Technical Analysis – Primary Downside Target Zone is 3813.25 to 3774.25

June E-mini S&P 500 Index futures are expected to open lower based on the pre-market trade, after giving up earlier gains. The benchmark index erased earlier gains after a report showed first-time claims for unemployment insurance unexpectedly fell sharply last week amid signs that hiring has picked up in the economy, the Labor Department reported Thursday.

At 14:20 GMT, June E-mini S&P 500 Index futures are trading 3863.00, down 17.75 or -0.46%.

The strong initial claims data suggests the economy is heating up, which could justify the rise in Treasury yields. A surge in yields has put pressure on equities recently, especially growth stocks.

 

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum has been trending lower since the formation of the closing price reversal top on March 18.

A trade through 3978.50 will negate the closing price reversal top and signal a resumption of the uptrend. The main trend will change to down on a move through the nearest main bottom at 3710.50.

The minor trend is down. This confirms the shift in momentum. The minor trend will change to up on a trade through 3944.50.

The short-term range is 3710.50 to 3978.50. Its 50% level at 3844.50 is the first downside target.

The main range is 3648.00 to 3978.50. Its retracement zone at 3813.25 to 3774.25 is the primary downside target.

Since the main trend is up, look for technical bounces on the first test of 3844.50 and 3813.25.

Daily Swing Chart Technical Forecast

The downside momentum suggests that the index is headed into the first 50% level at 3844.50. Look for buyers on the first test of this level.

If 3844.50 fails as support then look for the selling to possibly extend into 3813.25 to 3774.25. Look for even stronger buying on a pullback into this area.

It’s a little early, but the index is down five sessions from its last main top. Start watching for a possible closing price reversal bottom. This chart pattern will indicate the selling may be getting weaker, or the buying a little stronger.

A close over 3880.75 will form the reversal bottom. If confirmed then look for the start of a 2 to 3 day rally.

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