E-mini S&P 500 Index (ES) Futures Technical Analysis – Strengthens Over 2836.75, Weakens Under 2827.75

The benchmark E-mini S&P 500 Index finished sharply higher on Friday adding to the solid gains that produced a 13.1 percent quarterly gain in the cash market. This was the biggest quarterly gain since the third quarter of 2009 and also the best quarter in 20 years.

The index was supported by the hope that the renewed negotiations between the United States and China would produce a long-awaited trade deal. The rally was also helped by a rise in Treasury yields which reduced fears of a recession in the U.S. later in the year.

On Friday, June E-mini S&P 500 Index futures settled at 2837.75, up 16.75 or +0.59%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 2866.00 will signal the resumption of the uptrend. A trade through 2789.50 will change the main trend to down.

The minor trend is also up. The minor trend changed to up on a trade through 2835.00 on Friday. This also shifted momentum to the upside. A trade through 2791.25 will change the minor trend to down. This will also shift momentum to the downside.

The main range is 2726.50 to 2866.00. Its retracement zone at 2796.25 to 2779.75 is controlling the direction of the index. It provided support last week when it stopped the selling at 2789.50 on March 25.

The minor range is 2866.00 to 2789.50. Its retracement zone at 2827.75 to 2836.75 is the primary upside target. Overtaking this zone will indicate the buying is getting stronger. It will also turn this zone into support.

Daily Swing Chart Technical Forecast

Based on Friday’s close at 2837.75, the direction of the June E-mini S&P 500 Index on Monday is likely to be determined by trader reaction to the minor Fibonacci level at 2836.75.

Bullish Scenario

A sustained move over 2836.75 will indicate the presence of buyers. If this move creates enough upside momentum then look for the rally to extend into the main top at 2866.00. This is also a potential trigger point for an acceleration to the upside. The daily chart indicates there is plenty of room to the upside with the next major upside target the September 21, 2018 main top at 2961.25.

Bearish Scenario

The inability to sustain a rally over 2836.75 will signal the presence of sellers. The first target is the 50% level at 2827.75. This is a potential trigger point for an acceleration to the downside with the next targets the main 50% level at 2796.25, the minor bottom at 2791.75, the main bottom at 2789.50 and the main Fibonacci level at 2779.75.

Since the main trend is up, buyers could come in on the first test of the Fib level at 2779.75. However, if it fails then look for a potential acceleration to the downside with the next major targets the main bottom at 2726.50 and the major Fibonacci level at 2716.00.