E-mini S&P 500 Testing Lower End of Main Retracement Zone

June E-mini S&P 500 Index futures are trading lower late in the session on Wednesday despite a drop in Treasury yields. Both had moved sharply higher earlier in the week as investors reacted positively to the strength of the economy and hawkish remarks from Federal Reserve policymakers.

At 18:20 GMT, the June E-mini S&P 500 Index is trading 4463.25, down 41.75 or -0.93%. The S&P 500 Trust ETF (SPY) is at $445.43, down $4.16 or -0.93%.

The benchmark index is also being pressured by a jump in oil prices that renewed inflation fears. Oil prices ticked higher on the day, with international oil benchmark Brent crude advancing nearly 5% to top $120 per barrel. U.S. crude gained around 4% to more than $114 per barrel.

The rise in crude oil prices shot energy stocks higher on Wednesday. Schlumberger and Marathon Oil were among the top gainers on the S&P 500, respectively rising about 3% and 2%.

On the upside, General Mills added 2% after the food maker reported better-than-expected quarterly earnings and raised its full-year outlook.

On the downside, Adobe shares fell about 9% after the company forecasted lower-than-expected profit and revenue in its fiscal second quarter.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 4514.75 will signal a resumption of the uptrend. A move through 4129.50 will change the main trend to down.

The main range is 4800.00 to 4094.25. The market is currently trading inside its retracement zone at 4447.00 to 4530.50.

The short-term range is 4578.50 to 4094.25. Its retracement zone at 4393.50 to 4336.25 is potential support.

Short-Term Outlook

The direction of the June E-mini S&P 500 Index into the close on Wednesday will be determined by trader reaction to the main 50% level at 4447.00.

Bullish Scenario

A sustained move over 4447.25 will indicate the presence of buyers. If this is able to generate enough upside momentum then look for a possible retest of the intraday high at 4514.00, followed closely by the main Fibonacci level at 4530.50. This is a potential trigger point for an acceleration to the upside.

Bearish Scenario

A sustained move under 4447.00 will signal the presence of sellers. This could trigger a sharp break into the short-term Fibonacci level at 4393.50, followed by the short-term 50% level at 4336.25.