E-mini S&P Hits Multi-Month Low on Fed, Ukraine Tensions

March E-mini S&P 500 Index futures are trading sharply lower shortly after the cash market opening on Monday after a wicked sell-off last week, as geopolitical tensions in Ukraine roiled risk appetite ahead of a Federal Reserve policy meeting later this week.

At 14:47 GMT, March E-mini S&P 500 Index futures are trading 4337.00, down 53.00 or -1.21%. The S&P 500 Trust ETF (SPY) is at $428.39, down $9.59 or -2.19%.

The benchmark index is off to a rough start in 2022 as prospects of faster policy tightening steps spurred a rally in Treasury yields that dealt a sharp blow to popular growth stocks.

Investors are also bracing for a Russian invasion of Ukraine that could involve the deployment of U.S. troops into the region and more aggressive sanctions.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through the intraday low at 4311.50 will signal a resumption of the downtrend. A move through the nearest main bottom at 4252.75 will reaffirm the downtrend.

The index is currently testing a Fibonacci level at 4327.50.

The next major target area is a retracement zone at 4266.00 to 4137.50.

On the upside, potential resistance is a series of retracement levels at 4419.50, 4466.00 and 4531.50.

Daily Swing Chart Technical Forecast

The direction of the March E-mini S&P 500 Index into the close on Monday will be determined by trader reaction to 4327.50.

Bearish Scenario

A sustained move under 4327.50 will indicate the presence of sellers. This could trigger an acceleration into 4266.00, followed by 4252.75.

Taking out 4252.75 will reaffirm the downtrend with the July 9 main bottom at 4215.00 the next target.

A failure at 4215.00 could trigger an acceleration into the June 18 main bottom at 4129.00, followed by a long-term Fibonacci level at 4137.50.

Bullish Scenario

A sustained move over 4327.75 will signal the return of buyers. If this move creates enough upside momentum then look for the intraday rally to possibly extend into Friday’s close at 4390.00.

Taking out 4390.00 will turn the index higher for the day. This will put it in a position to form a potentially bullish closing price reversal bottom.

Turning higher for the session could also fuel a follow-through rally into 4319.50 and 4466.00.