E-mini S&P 500 Index (ES) Futures Technical Analysis – Trader Reaction to 4227.25 Sets Tone into Close

June E-mini S&P 500 Index futures are slightly lower shortly after the mid-session on Friday after closing at a record in the previous session, the first record since May 7. Traders are trying to build on Thursday’s gain as investors shrugged off a report showing inflation rising at its fastest pace since 2008. The Consumer Price Index jumped 5% in May from a year earlier, at a slightly higher pace than expected.

At 05:22 GMT, June E-mini S&P 500 Index futures are trading 4235.25, down 2.75 or -0.06%.

Underpinning the index on Friday is the drop in the 10-year Treasury yield to a three-month low of 1.44%. Helping to cap gains is speculation that the Federal Reserve will announce in August and September a strategy for reducing its massive bond-buying program.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 4249.00 will signal a resumption of the uptrend. A move through 4165.25 will change the main trend to down.

The minor trend is also up. A trade through 4165.25 will change the minor trend to down. This will also shift momentum to the downside.

The minor range is 4205.75 to 4249.00. Its 50% level at 4227.25 is potential support.

The second minor range is 4165.25 to 4249.00. Its 50% level at 4207.00 is another potential support level.

The short-term range is 4055.50 to 4249.00. If the main trend changes to down then look for the selling to possibly extend into its retracement zone at 4152.25 to 4129.50.

Daily Swing Chart Technical Forecast

The direction of the June E-mini S&P 500 Index into the close is likely to be determined by trader reaction to 4227.25.

Bullish Scenario

A sustained move over 4227.25 will indicate the presence of buyers. If this move is able to generate enough upside momentum then look for a test of 4249.00. This is a potential trigger point for an acceleration to the upside.

 Bearish Scenario

A sustained move under 4227.25 will signal the presence of sellers. The first downside targets are the pivot at 4207.00 and the minor bottom at 4205.75. The latter is a potential trigger point for an acceleration to the downside with 4165.25 the next main bottom target.