E-mini S&P 500 Index (ES) Futures Technical Analysis – Strong Over 2868.00, Weak Under 2841.00Based on the early price action, the direction of the June E-mini S&P 500 Index the rest of the session on Wednesday is likely to be determined by trader reaction to the 50% level at 2868.00 and the 50% level at 2841.00.
June E-mini S&P 500 Index futures are called higher based on the pre-market trade as investors shrugged off the worst job loss in the history of the ADP report that showed U.S. private payrolls dropped by 20.2 million in April, choosing instead to bet on the economy reopening.
Gains were being capped as crude oil prices reversed course to trade more than 5% lower. However, this news was somewhat offset by higher airline and cruise line stocks. Large-cap technology companies, including Microsoft, Apple and Facebook, added to the strength in the benchmark index.
At 13:20 GMT, June E-mini S&P 500 Index futures are trading 2874.75, up 16.50 or +0.58%.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart, however, momentum has been trending lower since the formation of the closing price reversal top on April 30.
A trade through 2965.00 will negate the closing price reversal top and signal a resumption of the uptrend. The main trend will change to down if 2717.25 fails as support.
The minor trend is also up. A trade through 2771.00 will change the minor trend to down. This will reaffirm the shift in momentum to the downside.
The index is currently trading inside a major retracement zone at 2785.75 to 2930.25. This zone is controlling the longer-term direction of the index. Inside this zone is a pair of 50% levels at 2868.00 to 2841.00.
Support is the intermediate retracement zone at 2765.50 to 2652.50.
The major support is the price cluster at 2785.75 to 2765.50.
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 on Wednesday is likely to be determined by trader reaction to the 50% level at 2868.00 and the 50% level at 2841.00.
A sustained move over 2868.00 will indicate the presence of buyers. This could trigger a surge into 2930.25, followed by the main top at 2965.00.
A sustained move under 2841.00 will signal the presence of sellers. If this creates enough downside momentum then look for the selling to possibly extend into the support cluster at 2785.75 to 2765.50. Inside this area is a minor bottom at 2771.00.