E-mini S&P 500 Index (ES) Futures Technical Analysis – May 7, 2019 Forecast

The benchmark S&P 500 Index is trading sharply lower on Tuesday, retracing most of yesterday’s intraday gains. The catalyst behind the selling pressure is a comment from a top U.S. trade official who indicated that higher tariffs on Chinese goods are coming later this week. U.S. Trade Representative Robert Lighthizer told reporters that the U.S. will increase levies on Chinese imports on Friday.

At 14:21 GMT, June E-mini S&P 500 Index futures are trading 2896.00, down 36.50 or -1.24%.

Daily Technical Analysis

The main trend is down according to the daily swing chart. The trend turned down on Monday when sellers took out the previous main bottom at 2889.50. The main trend will change to up on a trade through 2961.25. A trade though 2883.50 will signal a resumption of the downtrend.

The minor range is 2961.25 to 2883.50. Its retracement zone at 2922.50 to 2931.50 is resistance. This zone stopped the rally on Monday, indicating that sellers are trying to form a potentially bearish secondary top.

The intermediate range is 2789.50 to 2961.25. Its retracement zone at 2875.25 to 2855.00 is the next downside target zone. Watch for a technical bounce on the first test of this area.

The main retracement zone is 2843.75 to 2816.00. This zone is controlling the longer-term direction of the market.

Daily Technical Forecast

Based on the early price action, the direction of the June E-mini S&P 500 Index the rest of the session is likely to be determined by trader reaction to the uptrending Gann angle at 2890.75.

Bearish Scenario

Taking out and sustaining a move under 2890.75 will indicate the presence of sellers. This could trigger a quick break into yesterday’s low at 2883.50, followed closely by the 50% level at 2875.25.

The 50% level at 2875.25 is the trigger point for an acceleration to the downside into the Fibonacci level at 2855.00, followed closely by an uptrending Gann angle at 2849.50.

Bullish Scenario

A sustained move over 2890.75 will signal the presence of buyers. If this move creates enough upside momentum then look for the rally to possible extend into the next uptrending Gann angle at 2909.50.

Overtaking 2909.50 will indicate the buying is getting stronger. This could trigger a further rally into the short-term retracement zone at 2922.50 to 2931.50. Inside this zone is a downtrending Gann angle at 2929.25. Since the main trend is down, sellers could come in on a test of this area.

A surge through 2931.50 will signal the presence of strong buyers.