June E-mini S&P 500 Index futures are expected to open lower based on the pre-market trade. The selling is being fueled by worries about a slowdown in the economy, position-squaring ahead of Wednesday’s release of the minutes of the March Fed meeting, but most of all by concerns over the start of earnings season on Friday, which is expected to be the worst in three years.
At 12:41 GMT, June E-mini S&P 500 Index futures are trading at 2891.25, down 7.25 or -0.25%.
Daily Technical Analysis
The main trend is up according to the daily swing chart, however, the early price action suggests a potentially bearish closing price reversal top may be forming.
A trade through 2900.00 will reaffirm the uptrend. A close under 2898.25 will form a closing price reversal top. If confirmed on Wednesday, this could lead to a 2 to 3 day correction.
The short-term range is 2789.50 to 2900.00. Its retracement zone at 2844.75 to 2831.75 is the first downside target.
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 2898.25.
A sustained move over 2898.25 will indicate the presence of buyers. Taking out today’s intraday high at 2900.00 will reaffirm the uptrend. Overcoming the uptrending Gann angle at 2902.50 will put the index in a bullish position and could trigger an acceleration to the upside.
A sustained move under 2898.25 will signal the presence of sellers. The first downside target is an uptrending Gann angle at 2887.00. If this fails then look for the selling to possibly extend into the next uptrending Gann angle at 2877.50.
Look for a technical bounce on the first test of 2877.50. However, if it fails, be prepared for an acceleration to the downside. The daily chart indicates there is plenty of room to the downside with the next major target the short-term 50% level at 2844.75.