E-mini S&P 500 Trading on Weak Side of Key Retracement Zone

March E-mini S&P 500 Index futures are trading flat for a second session on Tuesday as investors await the release of Thursday’s major U.S. consumer inflation report that is crucial to the Federal Reserve’s tapering timeline.

At 14:51 GMT, March E-mini S&P 500 Index futures are at 4467.25, down 8.50 or -0.19%. The S&P 500 Trust ETF (SPY) is trading $446.36, down $0.90 or -0.20%.

Although there was little impact on the benchmark index, corporate earnings were driving the movement in several individual stocks on Tuesday.

Harley-Davidson jumped 8% after the company reported a surprise profit for the fourth quarter. Pfizer shares tumbled 3.6% after the drugmaker’s fourth-quarter revenue came in lower than Wall Street analysts expected. Pfizer’s full-year earnings guidance also disappointed.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, however, momentum is trending higher.

A trade through 4586.00 will change the main trend to up. A move through 4212.75 will signal a resumption of the downtrend.

The minor trend is up. This is controlling the momentum. A trade through 4263.25 will change the minor trend to down.

The short-term range is 4808.25 to 4212.75. Its retracement zone at 4510.50 to 4580.75 is resistance.

The first downside target zone is 4491.25 to 4327.50. This is followed by the main support area at 4266.00 to 4137.50.

Daily Swing Chart Technical Forecast

The direction of the March E-mini S&P 500 Index into the close on Tuesday is likely to be determined by trader reaction to 4510.50.

Bearish Scenario

A sustained move under 4510.50 will indicate the presence of sellers. The first downside target is a 50% level at 4419.25.

Taking out 4419.25 will indicate the selling pressure is getting stronger with the next targets layered at 4327.50, 4266.00 and 4137.50.

Bullish Scenario

A sustained move over 4510.50 will signal the presence of buyers. If this creates enough upside momentum then look for a rally into 4580.75, followed by 4586.00. The latter is a potential trigger point for an acceleration into 4739.50.

Side Notes

With the main trend down, it looks as if sellers are winning the battle at 4510.50 to 4580.75. If successful, this could lead to the formation of a bearish secondary lower top, which could lead to a retest of the main bottom at 4212.75 over the near-term.