E-mini S&P 500 Index (ES) Futures Technical Analysis – Set-Up for Closing Price Reversal Top

June E-mini S&P 500 Index futures are giving back earlier gains after an attempt to follow-through to the upside, following Friday’s mixed jobs report, failed to attract enough new buyers to sustain the rally. The price action suggests investors may be growing tired of the day-to-day commentary on U.S.-China trade relations, and may have already priced-in nearly all of the good news. Furthermore, investors may be taking a little off the top ahead of the start of earnings season on Friday, which is expected to be the worst in three years.

At 05:00 GMT, June E-mini S&P 500 Index futures are trading 2891.25, down 4.75 or -0.16%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was reaffirmed earlier in the session. The market is in no position to change the main trend to down, but due to the prolonged rally in terms of price and time, it is inside the window of time for a potentially bearish closing price reversal top.

We’ve already seen a higher-high. Now all we need is a lower close to form the chart pattern. If formed and confirmed on Tuesday, we could see the start of a 2 to 3 day correction.

The short-term range is 2789.50 to 2899.50. If there is a closing price reversal top then we could see a correction into its retracement zone at 2844.50 to 2831.50.

Daily Swing Chart Technical Forecast

Based on the early price action, the direction of the June E-mini S&P 500 Index the rest of the session is likely to be determined by trader reaction to Friday’s close at 2896.00.

Bullish Scenario

Retaining and sustaining a rally over 2896.00 will signal the return of buyers. Taking out the intraday high at 2899.50 will indicate the buying is getting stronger. If this move can create enough upside momentum then we could see an eventual rally into the September 21, 2018 main top at 2961.25.

Bearish Scenario

A sustained move under 2896.00 will indicate the presence of sellers. This will put the index in a position to form the potentially bearish closing price reversal top. If this move creates enough downside momentum then look for sellers to go after weak stops under recent daily lows at 2880.50, 2871.00, 2865.25 and 2862.25.