E-mini S&P 500 Index (ES) Futures Technical Analysis – Reaction to 4664.25 – 4630.25 Will Set the Tone

March E-mini S&P 500 Index futures are edging higher shortly after the cash market opening on Wednesday, with banking and energy shares leading the gains. Interest-rate sensitive growth stocks, however, remained under pressure from the Federal Reserve’s hawkish signals.

At 14:40 GMT, March E-mini S&P 500 Index futures are trading 4708.25, up 15.75 or +0.34%. The S&P 500 Trust ETF is at $466.94, down $1.44 or -0.31%.

So far this week, investors have rotated out of technology-heavy growth shares and into cyclical names such as industrials, energy and materials that stand to benefit the most in a high interest rate environment.

In economic news, the U.S. 10-year Treasury yield, the benchmark for global borrowing costs, touched its highest level since April 2021 on Thursday.

Additionally, data showed the number of Americans filing new claims for unemployment benefits rose last week.

After a stronger-than-expected ADP private payrolls report on Wednesday, the Labor Department’s more comprehensive non-farm payrolls data for December will be closely watched on Friday.

In stock-related news, shares of major Wall Street lenders were up nearly 1% each in pre-market trading. Occidental Petroleum added 2.9%, leading gains among oil companies.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 4668.00 will signal a resumption of the downtrend. A move through 4808.25 will change the main trend to up.

The short-term range is 4520.25 to 4808.25. Its retracement zone at 4664.25 to 4630.25 is the next downside target and potential support.

The minor range is 4808.25 to 4668.00. Its retracement zone at 4738.25 to 4754.75 is the nearest upside target.

Daily Swing Chart Technical Forecast

The selling stopped earlier in the session at 4668.00. This was slightly above the first target at 4664.25. Buyers could be trying to form a secondary higher bottom.

If the Fibonacci level at 4630.25 fails as support then look for a possible acceleration to the downside with 4530.50 – 4520.25 the next likely target.

If the early momentum increases throughout the day, we could see a rally into the minor retracement zone at 4738.25 to 4754.75. Since the main trend is down, sellers could come in on a test of this area. They will be trying to form a potentially bearish secondary lower top.