E-mini S&P: Plenty of Room to Downside with 4129.50 Target

June E-mini S&P 500 Index futures are down sharply early Monday as investors reacted to a steep plunge in Asian equity markets. Investors are also bracing for the likelihood of rising interest rates and a slew of earnings this week from major technology companies such as Amazon and Apple.

At 08:15 GMT, June E-mini S&P 500 Index futures are trading 4233.50, down 33.75 or -0.79%. On Friday, the S&P 500 Trust ETF (SPY) settled at $426.09, down $11.97 or -2.73%.

China’s Shenzhen Stocks Off by 6%

U.S. investors are tracking a major slide in mainland Chinese indexes, which are leading losses in the Asia-Pacific region.

The Shenzhen component tumbled 6.08% to 10,379.28 while the Shanghai composite declined 5.13% to 2,928.51.

China has been struggling to contain its worst outbreak of COVID-19 despite harsh lockdowns in its largest city, Shanghai.

In further confirmation of the rapidly spreading disease, Chinese officials in the capital of Beijing are warning that the virus has been spreading undetected for about a week.

Looking Ahead …

S&P investors are bracing for what will be the busiest week yet in corporate earnings season. About 160 companies in the S&P 500 are expected to report earnings this week, and all eyes will be on reports from big tech companies, including Amazon, Apple, Google-parent Alphabet, Meta Platforms and Microsoft.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through the intraday low at 4218.50 will signal a resumption of the downtrend. A move through 4509.00 will change the main trend to up.

The short-term range is 4094.25 to 4631.00. The market is currently trading on the weak side of its retracement zone at 4299.25 to 4362.75, making the area resistance.

Daily Swing Chart Technical Forecast

The direction of the June E-mini S&P 500 Index into the close on Monday is likely to be determined by trader reaction to 4267.25.

Bearish Scenario

A sustained move under 4267.25 will indicate the presence of sellers. Taking out 4218.50 will indicate the selling pressure is getting stronger. This could trigger an acceleration into a main bottom at 4129.50, followed by the 2022 low at 4094.25.

Bullish Scenario

A sustained move over 4267.25 will signal the presence of buyers. If this creates enough upside momentum then look for a surge into 4299.25. Overtaking this level will mean the buying is getting stronger with a 50% level at 4262.75 a potential target.