E-mini S&P 500 Index (ES) Futures Technical Analysis – Strong Selling Pressure Targets 4040.75 to 3994.00

June E-mini S&P 500 Index futures are trading sharply lower on Wednesday, led by losses in rate-sensitive technology stocks that rising inflation could force the U.S. Federal Reserve to pare back its support soon.

Meanwhile, the yield on 10-year Treasury notes touched a one-week high, driving down shares of tech-heavyweights Apple Inc, Microsoft Corp and Facebook Inc by about 1% premarket.

At 13:21 GMT, June E-mini S&P 500 Index futures are trading 4073.00, down 50.00 or -1.21%.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 4029.25 will reaffirm the downtrend. A move through 4179.50 will change the main trend to down.

The short-term range is 4238.25 to 4029.25. Its retracement zone at 4133.75 to 4158.50 is resistance. The index is trading on the weak side of this zone, helping to form the secondary lower top at 4179.50.

The minor range is 4029.25 to 4179.50. The index is also trading on the weak side of its pivot at 4104.50, indicating the selling is getting stronger.

The main range is 3843.25 to 4238.25. Its retracement zone at 4040.75 to 3994.00 is the primary downside target. This zone stopped the selling on May 13 at 4029.25.

Taking out the main Fibonacci level at 3994.00 could trigger an acceleration to the downside.

Daily Swing Chart Technical Forecast

The direction of the June E-mini S&P 500 Index on Wednesday is likely to be determined by trader reaction to 4104.50.

Bearish Scenario

A sustained move under 4104.25 will indicate the presence of sellers. If this creates enough downside momentum then look for the selling to possibly extend into 4040.75, followed by 4029.25.

Taking out 4029.25 will reaffirm the downtrend, which should lead to a test of 3994.00. Watch for a technical bounce on the first test of this level. If it fails, however, look for an acceleration into the March 25 main bottom at 3843.25 over the near-term.

Bullish Scenario

A sustained move over 4104.50 will signal the presence of buyers. This could create a labored rally with potential upside targets coming in at 4133.75, 4158.50 and 4179.50. The trend will change to up if buyers can take out 4179.50.

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