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E-Mini S&P: Momentum Shifts Lower on Trade Through 4438.50

By:
James Hyerczyk
Published: Feb 11, 2022, 08:32 UTC

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

E-mini S&P 500 Index

In this article:

March E-mini S&P 500 Index futures are trading lower but up from their overnight low. Early traders are being cautious following yesterday’s sharp sell-off on Wall Street that was spurred by the hottest inflation reading in four decades.

At 08:13 GMT, March E-mini S&P 500 Index futures are trading 4488.25, down 9.25 or -0.21%. On Thursday, the S&P 500 Trust ETF (SPY) settled at $449.34, down $8.20 or -1.79%.

Yesterday’s plunge came as Treasury yields spiked in reaction to data that showed consumer prices surged more than 7% in January, the highest gain since February 1982. The hotter-than-expected inflation reading prompted St. Louis Fed President James Bullard to call for accelerating rate hikes – a full percentage point increase by the start of July.

Daily March E-mini S&P 500 Index

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 4438.50 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 next downside targets are a 50% level at 4419.25 and a Fibonacci level at 4327.50. This is followed by a retracement zone at 4266.00 to 4137.50.

Daily Swing Chart Technical Analysis

The direction of the March E-mini S&P 500 Index on Friday 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. If this creates enough downside momentum then look for the selling to extend into 4438.50 and 4419.25.

Taking out 4419.25 could trigger an acceleration into 4327.50, followed by 4266.00, a main bottom at 4212.75 and 4137.50.

Bullish Scenario

A sustained move over 4510.50 will signal the presence of buyers. If this generates enough upside momentum then look for a surge into 4580.75, followed by the main top at 4586.00. This is a potential trigger point for an acceleration to the upside with 4739.50 the next major target.

For a look at all of today’s economic events, check out our economic calendar.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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