E-mini S&P 500 Reaction to 4530.50 Sets Course on Monday

June E-mini S&P 500 Index futures closed better and near the high of the session on Friday as financial shares rose after the benchmark Treasury yield jumped to its highest level in nearly three years. For the week, the benchmark index registered a solid gain of 1.8%, helped mostly by a strong performance in the technology sector.

On Friday, June E-mini S&P 500 Index futures settled at 4536.50, up 24.00 or +0.53%. The S&P 500 Trust ETF (SPY) finished at $452.65, up $2.16 or +0.48%.

The S&P 500 Financials Sector gave the S&P 500 its biggest boost on Friday, rising 1.3%, while technology and consumer discretionary sectors were the only two major sectors to end lower on the day.

The utilities sector also rose sharply, hitting a record high as investors favored defensive stocks with the Russia-Ukraine war still ranging after a month. The sector ended up 1.5% on the day and up 3.5% for the week, while the energy sector ended up 2.3% on the day and jumped more than 7% for the week following sharp gains in oil prices.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through the main top at 4578.50 will reaffirm the uptrend.

A trade through 4129.50 will change the main trend to down. This is highly unlikely, but due to the prolonged move up in terms of price and time, Monday’s session will begin with the index inside the window of time for a potentially bearish closing price reversal top.

If confirmed, we could see the start of a minimum 2-3 day correction. It will not signal a change in trend.

The main range is 4800.00 to 4094.25. On Friday, the index closed a little above its retracement zone at 4530.50 to 4447.00, making it potential support.

The short-term range is 4578.50 to 4094.25. Its retracement zone at 4383.50 to 4336.25 is potential support.

Short-Term Outlook

The next major move by the June E-mini S&P 500 Index will be determined by trader reaction to the main retracement zone at 4530.50 to 4447.00.

Look for the upside bias to continue on a sustained move over 4530.50. A downside bias could develop on a sustained move under 4447.00.

Trading between 4530.50 and 4447.00 will create a neutral tone and signal investor indecision.