E-mini S&P 500 Index (ES) Futures Technical Analysis – Trader Reaction to Pivot at 2986.00 Sets the Tone

September E-mini S&P 500 Index futures are trading lower shortly after the cash market on Monday, but buyers have clawed back more than half of its earlier losses. The early selling pressure was fueled by investors worried about a second wave of coronavirus cases as the U.S. economy reopens.

Stocks which stand to benefit the most from a successful reopening led the losses. Carnival and Royal Caribbean cruise lines each lost more than 7%. United Airlines lost 7.9% and American Airlines slid 7.6%. Retailers Kohl’s and Gap declined. These types of stocks surged in May as investors bet that the worst of the virus was over.

At 14:42 GMT, September E-mini S&P 500 Index futures are at 2981.00, down 42.75 or -1.41%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum is trending lower. A trade through 2896.25 will change the main trend to down. A move through 3220.50 will signal a resumption of the uptrend.

The minor trend is down. This move confirms the shift in momentum to down.

The main range is 3396.50 to 3165.50. Its retracement zone at 2926.25 to 2781.00 is controlling the longer-term direction of the index. Earlier today, sellers tested the Fibonacci level at 2926.25.

The short-term range is 2751.50 to 3220.50. The index is currently testing its retracement zone at 2986.00 to 2930.50.

The minor range is 3220.50 to 2923.75. Its 50% level at 3072.25 is the nearest upside target.

Daily Swing Chart Technical Forecast

Based on the early price action and the current price at 2981.00, the direction of the September E-mini S&P 500 Index is likely to be determined by trader reaction to the 50% level at 2986.00.

Bullish Scenario

A sustained move over 2986.00 will indicate the presence of buyers. If this move is able to generate enough upside momentum then look for a potential surge into 3072.25.

Bearish Scenario

A sustained move under 2986.00 will signal the presence of sellers. The first downside target is 2926.25, followed by 2923.75 and 2896.25.

Look for an acceleration into 2781.00 if 2896.25 fails as support.