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James Hyerczyk
E-mini September E-mini S&P 500 Index

September E-mini S&P 500 Index futures are trading sharply lower shortly after the cash market opening. The early selling was fueled by worries over an escalation of the trade war between the United States and China after the two economic powerhouses imposed new tariffs on each other’s goods. The second wave of selling occurred after the release of weaker-than-expected U.S. manufacturing data dampened investor sentiment.

At 14:23 GMT, September E-mini S&P 500 Index futures are trading 2897.00, down 27.75 or -0.93%.

On Sunday, the U.S. imposed 15% tariffs on a multitude of Chinese goods. At the same time, China imposed new charges on U.S. products beginning on September 1.

On Monday, the index was hit harder after the opening, following the release of the U.S. ISM Manufacturing PMI that declined to 49.1%. This was the lowest reading in more than three years. Coming in under 50% also signaled a contraction.

Daily September E-mini S&P 500 Index

Daily Technical Analysis

The main trend is up according to the daily swing chart. The index turned up on Friday when buyers drove it through a pair of main tops and into 2946.50. The rally stalled at this level, probably because of the low buying volume ahead of Monday’s U.S. bank holiday. The minor reversal top also signaled the selling was greater than the buying at the end of the session.

A trade through 2946.50 will signal a resumption of the uptrend. The main trend will change to down on a trade through 2810.25.

The minor trend is also up. Today’s price action made 2946.50 a new minor top. A trade through 2851.75 will change the minor trend to down. This will also shift momentum to the downside.

The main range is 2732.25 to 3029.50. Its retracement zone at 2880.75 to 2845.75 is potential support. This zone is controlling the near-term direction of the index.

The short-term range is 3029.50 to 2775.75. Its retracement zone at 2902.75 to 2932.50 is acting like resistance today.

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Daily Technical Forecast

Based on the early price action, the direction of the September E-mini S&P 500 Index the rest of the session on Tuesday is likely to be determined by trader reaction to the uptrending Gann angle at 2890.25 and the short-term 50% level at 2902.75. Holding inside these prices will create a neutral tone.

Bullish Scenario

Holding 2890.25 will indicate that buyers have stopped the price slide. However, the trigger point for a potential acceleration to the upside is 2902.75.

Taking out 2902.75 could trigger a rally into a long-term downtrending Gann angle at 2925.50, followed by the short-term Fibonacci level at 2932.50, followed by the minor top at 2946.50.

Bearish Scenario

The inability to overcome 2902.75 will signal the presence of sellers. Taking out 2890.25 will indicate the selling is getting stronger with the next target the main 50% level at 2880.75.

The trigger point for an acceleration to the downside is 2880.75. Taking this out could trigger a move into a short-term uptrending Gann angle at 2850.25, followed by the main Fibonacci level at 2845.75.

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