E-mini S&P 500 Index (ES) Futures Technical Analysis – Reaction to 3932.75 Sets Early Tone

June E-mini S&P 500 Index futures finished slightly higher on Friday as investors bought shares that should benefit from a strong reopening of the U.S. economy, but also sold technology stocks, leading to a nearly flat trading session.

Rising yields signaled investors are looking for a strong economic recovery. This news helped drive up demand for cyclical and underpriced value stocks in the index, while dulling the appeal of high-growth technology shares.

On Friday, June E-mini S&P 500 Index futures settled at 3932.75, up 5.50 or +0.14%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 3949.00 will signal a resumption of the uptrend.

A trade through 3710.50 will change the main trend to down. This is highly unlikely but the index is vulnerable to a closing price reversal top. This chart pattern won’t change the trend, but it will indicate the selling is greater than the buying at current price levels.

Friday’s inside trading range suggests investor indecision and impending volatility.

The short-term range is 3710.50 to 3949.00. Its 50% level at 3829.75 is the nearest downside target and possible support level.

The main range is 3648.00 to 3949.00. Its retracement zone at 3798.50 to 3763.00 is the primary downside target.

Short-Term Outlook

The direction of the June E-mini S&P 500 Index early Monday is likely to be determined by trader reaction to Friday’s close at 3932.75.

Bullish Scenario

A sustained move over 3932.75 will indicate the presence of buyers. The first upside target is last week’s high at 3949.00. This is a potential trigger point for an acceleration to the upside.

Bearish Scenario

A sustained move under 3932.75 will signal the presence of sellers. Taking out 3883.25 will indicate the selling is getting stronger. It will also make 3949.00 a new minor top, breaking the six-day chart pattern of higher lows.

Taking out 3949.00 then closing lower for the session will form a potentially bearish closing price reversal top. If confirmed, this could lead to a 2 to 3 day counter-trend sell-off.