E-mini S&P 500 Index (ES) Futures Technical Analysis – Weakens Under 4412.00, Could Strenthen Over 4427.50

September E-mini S&P 500 Index futures are edging higher late in the session on Thursday after recovering from an earlier sell-off. Gains are being fueled by a strong performance in defensive and heavyweight stocks, as investors fretted over when the Federal Reserve could begin tapering its massive stimulus program.

At 20:24 GMT, September E-mini S&P 500 Index futures are trading 4403.00, up 8.50 or +0.19%.

The benchmark index is in a position to snap a two-day losing streak. Meeting minutes released Wednesday from the Fed’s gathering in July showed the central bank has started eyeing tapering its $120 billion in monthly bond purchases before the year-end.

In stock-related news, Dow component Goldman Sachs cut its economic forecast for the current quarter to 5.5% from 9%, adding to the negative sentiment. The firm also sees higher inflation for the rest of the year.

In economic news, first-time jobless claims last week hit a new pandemic-era low at 348,000, declining more than expected from the week prior. Additionally, the Philadelphia Fed Index, a gauge of growth in the region, still indicated expansion but at a level worse than expected. The August reading was 19.4, below the 22 consensus of economists polled by Dow Jones.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, but momentum is trending lower. A trade through 4224.00 will change the main trend to down. A move through 4476.50 will signal a resumption of the uptrend.

The minor trend is down. This move shifted momentum to the downside.

The minor range is 4476.50 to 4347.75. Its 50% level at 4412.25 stopped the buying earlier in the session.

The short-term range is 4224.00 to 4476.50. Its retracement zone at 4350.25 to 4320.50 is the next downside target and potential support. On Thursday, the selling stopped at 4350.25, just under the 50% level at 4350.25.

The main support is the retracement zone at 4301.25 to 4260.00.

Short-Term Outlook

Since the main trend is up, investors are likely to be looking for buying opportunities on tests of the retracement zones at 4350.25 to 4320.50 and 4301.25 to 4260.25. They will be trying to defend the main bottom at 4224.00 and the uptrend. They will also be trying to form a potentially bullish secondary higher bottom.

On the upside, the key level to watch is 4412.25. Aggressive counter-trend sellers may show up on a test of this level in an effort to form a potentially bearish secondary lower top.