E-mini S&P 500 Index (ES) Futures Technical Analysis – Shift in Momentum to Down Targets 3431.75 Support

September E-mini S&P 500 Index futures are trading lower on Tuesday after a four-day winning streak as a pause in Johnson & Johnson’s COVID-19 trial triggered concerns about the timing of a vaccine, although a tech stock rally did help prop up the index.

At 19:38 GMT, September E-mini S&P 500 Index futures are at 3511.50, down 21.25 or -0.60%.

Johnson & Johnson shed 2% as it said it would take “a few days’ to review its halted clinical trial following an unexplained illness in a study participant, possibly delaying results on one of the most closely watched efforts to contain the global pandemic.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 3541.00 will signal a resumption of the uptrend. The main trend changes to down on a break through the last main bottom at 3198.00.

The minor trend is also up. A trade through 3330.50 will change the minor trend to down. This will shift momentum to the downside.

Tuesday’s inside move indicates investor indecision and impending volatility. It doesn’t indicate an impending change in trend, however.

The short-term range is 3576.25 to 3198.00. Its retracement zone at 3431.75 to 3387.00 is the nearest potential downside target and possible support zone. Holding above this zone is helping to generate the current upside bias.

Short-Term Outlook

The headline changed from hopes for stimulus to concerns about a COVID-19 vaccine. That was enough to stop the rally, but not enough to fuel a steep break. This rally is still about momentum. No momentum and the market will remain rangebound.

Renewed upside momentum is likely to lead to a challenge of 3541.00. Taking out this level could trigger an acceleration to the upside with 3576.25 the next major upside target.

If downside momentum begins to increase then the short-term Fibonacci level at 3421.75 becomes the primary downside target, followed by the short-term 50% level at 3387.00. Since the trend is up, buyers are likely to come in on a test of this zone.

If 3387.00 fails as support then look for a possible acceleration to the downside.