E-mini S&P Reaction to 4447.00 Sets Early Tone on Tuesday

June E-mini S&P 500 Index futures are edging lower late in the session on Monday after giving up earlier gains. The benchmark index fell as Federal Reserve Chair Jerome Powell’s comments sparked bets of more aggressive interest rate hikes, adding to investor concerns as the Ukraine conflict rages on.

At 19:42 GMT, June E-mini S&P 500 Index futures are trading 4440.00, down 13.50 or -0.30%. The S&P 500 Trust ETF (SPY) is at $442.77, down $1.75 or -0.39%.

The U.S. central bank must move “expeditiously” to bring too-high inflation to heel, Powell said in his remarks prepared for delivery to a National Association of Business Economics conference, adding it could use bigger-than-usual interest rate hikes if needed.

Traders now see a 60.7% chance of a 50-basis point rate hike at the Fed’s May meeting, up from about 52% before Powell’s comments. The U.S. central bank last week raised interest rates by 25 bps to 0.25%-0.50%, the first increase since late 2018.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through the intraday high at 4473.00 will signal a resumption of the uptrend. A move through the main top at 4476.50 will reaffirm the uptrend. A trade through 4129.50 will change the main trend to down.

The main range is 4800.00 to 4094.25. Its retracement zone at 4447.25 to 4530.50 is potential resistance.

The short-term range is 4578.50 to 4094.25. The index is trading on the strong side of its retracement zone at 4393.50 to 4336.25, making it support.

The minor range is 4129.50 to 4473.00. Its 50% level or pivot at 4301.25 is additional support.

Short-Term Outlook

The direction of the June E-mini S&P 500 Index into the close on Monday and early Tuesday will be determined by trader reaction to 4453.50.

Bullish Scenario

A sustained move over 4453.50 will indicate the presence of buyers. Taking out the intraday high at 4473.00 will indicate the buying is getting stronger. This could trigger a surge into the main top at 4476.50. This is a potential trigger point for an acceleration to the upside with 4530.50 the next major target.

Bearish Scenario

A sustained move under 4453.50 will signal the presence of sellers. Crossing to the weak side of the pivot at 4447.25 will indicate the selling pressure is getting stronger. This could trigger a further break into the short-term 50% level at 4336.25.

Side Notes

A close below 4453.50 will form a potentially bearish closing price reversal top. If confirmed, this could trigger the start of a 2 to 3 day correction with 4301.25 a potential downside target.