E-mini S&P 500 Index (ES) Futures Technical Analysis – Trader Reaction to 2930.25 Sets the Tone

June E-mini S&P 500 Index futures are edging lower on Thursday shortly before the cash market opening after clawing back some of its earlier losses. Stocks were pressured earlier in the session on simmering tensions between the United States and China and uncertainty over the reopening of the economy as states begin to lift coronavirus-related restrictions.

At 14:30 GMT, June E-mini S&P 500 Index futures are trading 2964.25, down 4.25 or -0.14%.

Investors cut earlier losses after the Labor Department reported another 2.4 million people filed for unemployment benefits last week. This number confirmed that the pace of filings is slowing which investors saw as a positive sign for the economy.

On Wednesday, the broad cash-based S&P 500 closed at its highest level since March 6. This advance was led by strong performances by Apple, Disney and McDonald’s.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, momentum has been slowed by Tuesday’s closing price reversal top.

A trade through 2976.25 will negate the closing price reversal top and signal a resumption of the uptrend. The main trend will change to down on a move through 2760.25.

The main range is 3397.75 to 2174.00. Its retracement zone at 2930.25 to 2785.75 is support. It is also controlling the longer-term direction of the index.

The minor range is 2760.25 to 2976.25. Its 50% level at 2868.25 is additional support.

Daily Swing Chart Technical Forecast

Based on the early price action and the current price at 2964.25, the direction of the June E-mini S&P 500 Index the rest of the session on Thursday is likely to be determined by trader reaction to the major Fibonacci level at 2930.25.

Bullish Scenario

A sustained move over 2930.25 will indicate the presence of buyers. Taking out 2976.25 will reaffirm the uptrend. This could trigger an acceleration to the upside since the next major resistance doesn’t come in until 3131.00.

Bearish Scenario

A sustained move under 2930.25 will signal the presence of sellers. Taking out yesterday’s low at 2980.50 will make 2976.25 a new main top.

We could see an acceleration to the downside under 2976.25 with 2868.25 the next target. If this level fails as support then look for another possible steep break with the next target a support cluster at 2785.75 to 2765.50.