E-mini S&P 500 Index (ES) Futures Technical Analysis – Strengthens Over 3396.50, Weakens Under 3387.00

September E-mini S&P 500 Index futures are edging higher in light-trading during the premarket session on Wednesday. Volume and volatility are relatively low as the market hovers just under its all-time high at 3396.50. On Tuesday, the cash market S&P 500 closed at a record high, bringing an end to the shortest bear market in history.

At 07:15 GMT, September E-mini S&P 500 Index futures are trading 3388.25, up 1.25 or +0.04%.

On Tuesday, investors downplayed strong earnings reports from Home Depot and Wal Mart, but Amazon shares outperformed, rising more than 4%. Netflix and Alphabet both gained at least 2%.

Shares of big box retailer Target and home improvement company Lowe’s both rose slightly in after-hours trading on Tuesday ahead of the retailers’ quarterly results on Wednesday.

The FOMC’s last meeting minutes will be released at 18:00 GMT, offering an insight into the central bank’s deliberating process as it looks to shore up the economy in the wake of the pandemic.

Most analysts agree the Fed is not expected to indicate any new monetary stimulus initiatives in the minutes, however, investors will be watching for any change to the Fed’s approach to inflation that could be negative for the dollar.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 3396.50 will reaffirm the uptrend.

The main trend will change to down on a trade through 3191.50. This is highly unlikely, but due to the prolonged move up in terms of price and time, the index may be in a position to post a closing price reversal top.

The minor trend will change to down on a move through 3319.50. This will shift momentum to the downside.

The nearest support is a 50% level at 3356.50. This level is dynamic, meaning it will move up as the market move higher.

If the minor trend changes to down then the selling to extend into the short-term retracement zone, currently at 3294.25 to 3271.00.

Daily Swing Chart Technical Forecast

Trader reaction to yesterday’s close at 3387.00 will set the tone today. Holding above this level will indicate a continuation of the upside bias. If this creates enough upside momentum then look for a test of 3396.50. This is a potential trigger point for an acceleration to the upside.

The index made a higher-high early in the session so a close under 3387.00 will form a closing price reversal top. If formed, this could trigger the start of a 2 to 3 day counter-trend break or a 50% to 61.8% correction of the last upswing. The chart pattern, however, will not indicate a change in trend.

For a look at all of today’s economic events, check out our economic calendar.