E-mini S&P 500 Index (ES) Futures Technical Analysis – Weak after Microsoft Trims Fourth-Quarter Forecast

June E-mini S&P 500 Index futures are trading lower at the cash market opening on Thursday as a drop in shares of Microsoft offset weaker oil prices that eased concerns over rising inflation. Additionally, weaker than expected private payrolls data may be capping gains. Volume could be on the light side today ahead of Friday’s major U.S. Non-Farm Payrolls report.

At 13:46 GMT, the June E-mini S&P 500 Index is trading 4088.25, down 10.75 or -0.26%. The S&P 500 Trust ETF (SPY) is at $408.34, down $1.25 or -0.30%.

In stock related news, Microsoft fell 2.3% in premarket trading after the company cut its fourth-quarter forecast for profit and revenue, citing a hit from unfavorable currency movements.

In economic news, the ADP National Employment report showed private payrolls rose by 128,000 jobs last month, far below estimates of 300,000 jobs, and a decline from the downwardly revised 202,000 in April.

A separate reading showed initial claims for state unemployment benefits fell to a seasonally adjusted 200,000 for the week ended May 28. Economists polled by Reuters had forecast 210,000 applications.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, momentum has been trending lower since the confirmation of Tuesday’s closing price reversal top.

A trade through 4202.25 will negate the reversal top and signal a resumption of the uptrend. A move through 3807.50 will change the main trend to down.

The minor trend is also up. A trade through 3872.00 will change the minor trend to down. This will confirm the shift in momentum.

The short-main range is 4509.00 to 3807.50. Its retracement zone at 4158.25 to 4241.00 is resistance. This zone stopped the rally at 4202.25 on Tuesday.

The minor range is 3807.50 to 4202.25. Its retracement zone at 4004.75 to 3958.25 is the next downside target. Since the main trend is up, buyers could come in on a test of this area.

Daily Swing Chart Technical Forecast

Trader reaction to 4137.00 is likely to determine the direction of the June E-mini S&P 500 Index into the close on Thursday.

Bearish Scenario

A sustained move under 4136.75 will indicate the presence of sellers. If this creates enough downside momentum then look for the selling to extend into the retracement zone at 4004.75 – 3958.25.

Bullish Scenario

A sustained move over 4137.00 will signal the presence of buyers. If this generates enough upside momentum then look for a surge into the short-term pivot at 4158.25.

Overcoming 4158.25 will indicate the buying is getting stronger. This could lead to a test of the minor top at 4202.25, followed by the main retracement zone at 4241.00.