E-mini S&P 500 Index (ES) Futures Technical Analysis – Weakens Under 3894.75, Strengthens Over 3951.25

June E-mini S&P 500 Index futures are down sharply on Tuesday as investors returned to liquidating stocks on fears of a recession following a brief countertrend rally. According to CNBC, the selling was broad on Tuesday with 457 of the S&P 500 members declining.

At 15:40 GMT, the June E-mini S&P 500 index is trading 3887.75, down 84.00 or -2.11%. The S&P 500 Trust ETF (SPY) is at $388.64, down $8.28 or -2.09%.

In economic news, Flash Manufacturing PMI came in as expected at 57.5, but the Flash Services PMI fell to 53.5, below the 55.1 forecast.

The Richmond Manufacturing Index was a surprise negative nine and New Home Sales came in well below the 751K forecast at 591K.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 3807.50 will signal a resumption of the downtrend. A move through 4095.00 will change the main trend to up.

The minor trend is up. A trade through 3982.25 will reaffirm the trend.

The index is currently trading between a pair of pivots at 3894.75 and 3951.25.

On the upside, the nearest resistance is a retracement zone at 4055.25 – 4113.75.

Daily Swing Chart Technical Forecast

Trader reaction to 3894.75 will determine the direction of the June E-mini S&P 500 Index into the close on Tuesday.

Bearish Scenario

A sustained move under 3894.75 will indicate the presence of sellers. If this move generates enough downside momentum then look for the selling to possibly extend into the minor bottom at 3807.50. If this fails then look for the weakness to possibly continue into the March 8, 2021 main bottom at 3759.50.

Bullish Scenario

A sustained move over 3895.00 will signal the presence of buyers. This could lead to a test of the pivot at 3951.25. Overtaking this level could trigger a move into the minor bottom at 3982.25.

Taking out 3982.25 will shift momentum to the upside. This could trigger an acceleration into the short-term 50% level at 4055.25.