E-mini S&P 500 Index

E-mini S&P 500 Index (ES) Futures Technical Analysis – Short-Term Correction Targets 3111.50

June E-mini S&P 500 Index futures are edging lower shortly before the cash market open on Tuesday. Sellers blocked buyers from taking out last year’s close at 3231.00 with conviction for a second session. The price action suggests bullish investors are reluctant to take a major position ahead of the U.S. Federal Reserve’s monetary policies decisions on Wednesday.

At 12:59 GMT, June E-mini S&P 500 Index futures are trading 3198.00, down 29.50 or -0.91%.

According to CNBC, the speculative trades that have led the latest leg of the market’s comeback on optimism about the reopening of the economy were lower in early trading Tuesday.

United Airlines, Delta Air Lines each dropped more than 6% in premarket trading. Cruise lines Carnival and Royal Caribbean declined more than 5%. Retail-related trades Gap and Simon Property Group dropped as well.

Daily June E-mini S&P 500 Index

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 3231.25, Monday’s high, will signal a resumption of the uptrend. If this can create enough near-term momentum, we could see an eventual rally into the February 20 main top at 3397.75. This is the all-time high.

The main trend will change to down on a move through 2903.75. This is highly unlikely, but there is room for a normal 50% to 61.8% correction.

The minor trend is also up. A trade through 2992.00 will change the minor trend to down. This will also shift momentum to the downside.

The minor range is 2992.00 to 3231.25. Its 50% level at 3111.50 is the first potential downside target.

Daily Swing Chart Technical Forecast

The index is currently posting an inside move, which means trader indecision. Given this information, the index could turn bullish on a sustained move over 3231.25 and bearish on a trade through 3183.25.

Bullish Scenario

A sustained move over 3231.25 will indicate the presence of buyers. This could lead to an eventual test of 3397.75.

Bearish Scenario

A sustained move under 3183.25 will signal the presence of sellers. This move will also make 3231.25 a new minor top. If sellers are able to generate enough downside momentum then look for a possible break into 3111.50.

For a look at all of today’s economic events, check out our economic calendar.

Published by

James Hyerczyk

James A. Hyerczyk has worked as a fundamental and technical financial market analyst since 1982. His technical work features the pattern, price and time analysis techniques of W.D. Gann.