E-mini S&P 500 Index (ES) Futures Technical Analysis – Trapped by a Pair of Retracement Zones

September E-mini S&P 500 Index futures are trading higher shortly before the cash market opening on Friday. The buying is buying fueled by signs of an easing of tensions between the United States and China after a phone call between U.S. President Joe Biden and Chinese leader Xi Jinping. Thursday’s better-than-expected weekly initial claims report also soothed fears of a slowdown in the economic recovery.

At 13:25 GMT, September E-mini S&P 500 Index futures are trading 4502.75, up 19.75 or +0.44%.

Traders will be watching the energy sector early Friday amid higher oil prices on signs of supply tightness. Stocks on the radar include Exxon Mobil, Occidental Petroleum, Chevron and Halliburton.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, momentum is trending lower. A trade through 4539.50 will signal a resumption of the uptrend. A move through 4452.50 will change the main trend to down.

The minor trend is down. It turned down on Thursday when sellers took out 4482.75. A trade through 4519.75 will change the minor trend to up.

The short-term range is 4452.50 to 4539.50. Its retracement zone at 4496.00 to 4485.75 is potential support.

The minor range is 4539.50 to 4476.25. Its retracement zone at 4508.00 to 4515.50 is the first upside target.

Daily Swing Chart Technical Forecast

The direction of the September E-mini S&P 500 Index on Friday is likely to be determined by trader reaction to 4506.00.

Bullish Scenario

A sustained move over 4506.00 will indicate the presence of buyers. The first upside target is a 50% level at 4508.00, followed by a Fibonacci level at 4515.50.

Watch for aggressive counter-trend sellers on the first test of 4508.00 to 4515.50. This are going to try to produce a potentially bearish secondary lower top. Overtaking 4515.50 could trigger an acceleration to the upside with targets coming in at 4519.75 and 4539.50.

Bearish Scenario

A sustained move under 4506.00 will signal the presence of sellers. This could lead to a retest of 4496.00 to 4585.75.

If 4585.75 fails as support then look for the selling to possibly extend into 4476.25. We could see an acceleration to the downside if this low fails to hold. This could trigger a move into the main bottom at 4452.50.