E-mini S&P Recaptures Strong Side of Key Retracement Zone

The U.S. benchmark stock index futures contract is edging higher late in the session on Monday as traders downplayed recession fears and went bargain-hunting for beaten up technology shares.

At 18:29 GMT, June E-mini S&P 500 Index futures are trading 4565.00, up 25.75 or +0.57%. The S&P 500 Trust ETF (SPY) is at $455.68, up $2.76 or +0.61%.

Tech shares, which were among the hardest-hit sectors in the first quarter as investors feared the Fed’s rate-hiking plans could hinder the group, rose on Monday. Technology companies including Apple, Amazon, Nvidia and Microsoft were up more than 1%. However, they still trailed the Twitter, which surged more than 27% and Tesla, which rose 4%.

In other news, a key section of the yield curve remained inverted after the 2-year and 10-year Treasury yields shifted for the first time since 2019 Thursday evening. The 5-year note yield is also trading above its 30-year counterpart.

Meanwhile, oil moved higher with WTI crude jumping 2.4% and back above $100 a barrel, while Brent rose 1.8%, further raising investor concerns about a possible recession.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 4631.00 will signal a resumption uptrend. A move through 4129.50 will change the main trend to down. This is highly unlikely, but there is room for a normal 50% to 61.8% correction of its recent 10 day rally.

The minor trend is also up. A trade through 4501.25 will change the minor trend to down. This will shift momentum to the downside.

The main range is 4800.00 to 4094.25. The market is currently trading on the strong side of its retracement zone at 4530.50 to 4447.00, making it support.

The minor range is 4631.00 to 4501.25. The index is currently testing its pivot at 4566.25.

If the minor trend changes to down then its retracement zone at 4362.50 to 4299.25 will become the next target.

Daily Swing Chart Technical Forecast

The direction of the June E-mini S&P 500 Index into the close on Monday will be determined by trader reaction to the pivot at 4566.25.

Bullish Scenario

A sustained move over 4566.25 will indicate the presence of buyers. This could generate the momentum needed to retest the last main top at 4631.00.

Bearish Scenario

A sustained move under 4566.00 will signal the presence of sellers. The first target is the major Fibonacci level at 4530.50. If this fails then look for a move into the minor bottom at 4501.25.

Taking out 4501.25 will turn the minor trend lower and could trigger a further break into the major 50% level at 4447.00.