E-mini S&P 500 Index (ES) Futures Technical Analysis – Strong Selling Could Lead to Test of 3535.50 Pivot

September E-mini S&P 500 Index futures are trading lower shortly before the cash market opening on Thursday as a rally in technology stocks cooled and investors looked forward to data on weekly initial jobless claims just one day ahead of the August U.S. Non-Farm Payrolls report and the start of a long U.S. holiday week-end.

At 11:40 GMT, September E-mini S&P 500 Index futures are trading 3564.00, down 15.25 or -0.43%.

Other reports that could provide more clarity on the path to economic recovery include the U.S. Trade Balance and the ISM Non-Manufacturing PMI. The latter is expected to come in at 57.0, slightly below the previous reported 58.1. The initial claims report is expected to show first time filers for unemployment benefits totaled 955K during the week-ending August 29.

Daily Technical analysis

The main trend is up according to the daily swing chart. A trade through 3587.00 will signal a resumption of the uptrend.

The minor trend is also up. A trade through 3526.25 will make 3587.00 a new minor top, while taking out 3484.25 changes the minor trend and shifts momentum to the downside.

The minor range is 3484.25 to 3587.00. Its 50% level at 3535.50 is new support.

Short-Term Outlook

Taking out 3587.00 will signal a resumption of the uptrend. Overtaking the steep uptrending Gann angle at 3595.00 will put the index in an extremely bullish position.

The inability to overcome 3587.00 will indicate the presence of sellers. If this creates enough downside momentum then look for the selling to extend into the 50% level at 3535.50. Since the main trend is up, buyers could come in on a test of this level.

A break under 3535.50 will indicate the selling pressure is getting stronger. This could trigger a break into the steep uptrending Gann angle at 3504.75. Once again buyers may come in on a test of this angle. They will be defending the minor bottom at 3484.25.