E-mini S&P 500 Index (ES) Futures Technical Analysis – Trader Reaction to 4360.00 Sets Early Tone

September E-mini S&P 500 Index futures are edging lower early Monday as earnings season kicks off this week.

The cash market S&P 500 Index climbed to yet another record on Friday following a minor setback on Thursday. Banks and other stocks linked to an economic comeback led the way. With Friday’s gain, the benchmark posted a 0.4% gain for the week and its sixth positive week in seven, bringing its 2021 gains to over 16%.

At 03:00 GMT, September E-mini S&P 500 Index futures are trading 4354.75, down 5.25 or -0.12%.

The financial sector starts the earnings season off with reports from JPMorgan Chase and Goldman Sachs Tuesday. Bank of America, Citigroup and Wells Fargo report Wednesday, and Morgan Stanley and Truist report Thursday.

Investors also anticipate important data to be released this week, including key readings on inflation on Tuesday and Wednesday, and June retail sales on Friday.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. It was confirmed earlier in the session when buyers took out Friday’s high at 4364.00. A trade through 4126.75 will change the main trend to down.

The minor trend is also up. A trade through 4279.25 will change the minor trend to down. This is followed closely by another minor bottom at 4269.25.

The minor range is 4269.25 to 4365.25. Its 50% level at 4317.25 is the nearest support. This level will move up as the index moves higher.

The short-term range is 4126.75 to 4365.25. If the minor trend changes to down then its pivot at 4246.00 will become the next potential support level.

Daily Swing Chart Technical Forecast

The early price action suggests the direction of the September E-mini S&P 500 Index on Monday will be determined by trader reaction to 4360.00.

Bullish Scenario

A sustained move over 4360.00 will indicate the presence of buyers. The first upside target is 4365.25. Taking out this level could trigger an acceleration to the upside.

Bearish Scenario

A sustained move under 4360.00 will signal the presence of sellers. If this move creates enough downside momentum then look for sellers to possibly drive the index into the pivot at 4317.25.

Side Notes

A close under 4360.00 will form a potentially bearish closing price reversal top. If confirmed, we could see a 2 to 3 day correction but not necessarily a change in trend.