E-mini S&P 500 Could Be Forming Bearish Secondary Lower Top

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March E-mini S&P 500 Index futures are trading lower late in the session on Thursday as investors took profits from the technology stocks ahead of the start of the fourth quarter earnings season.

Among the S&P’s 11 major sectors, technology was the biggest drag on the index followed by healthcare and then consumer discretionary. The prospect of Federal Reserve interest rate hikes this year is a concern to growth sectors such as technology and consumer discretionary.

At 20:04 GMT, March E-mini S&P 500 Index futures are trading 4669.75, down 46.50 or -0.99%. The S&P 500 Trust ETF (SPY) is at $466.34, down $4.68 or -0.99%.

A rise in Treasury yields is contributing to the late session sell-off. Yields bounced back from early session weakness after Fed Governor Lael Brainard said the U.S. central bank would be in a position to start what could be several interest rate hikes this year “as soon as” it completes winding down its bond purchases, expected to happen in March.

Prices fell further after the Supreme Court blocked President Biden’s Covid vaccine mandate for large private businesses. However, the conservative majority court allowed similar requirements to stand for medical facilities that take Medicare or Medicaid payments.

Daily March E-mini S&P 500 Index

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 4572.75 will signal a resumption of the downtrend. A move through 4808.25 will change the main trend to up.

The minor trend is also down. A trade through 4739.50 will change the minor trend to up. This will shift momentum to the upside.

The minor range is 4808.25 to 4572.75. The index is currently trading on the weak side of its retracement zone at 4690.50 to 4718.25, making it resistance.

The short-term range is 4520.25 to 4808.25. The next downside target is the retracement zone at 4664.25 to 4630.25.

The main support is the long-term retracement zone at 4530.50 to 4465.00.

Daily Swing Chart Technical Forecast

The price action suggests the index is forming a potentially bearish secondary lower top. If this chart pattern is confirmed then we could see a resumption of the downtrend.

The short-term battle ground for buyers and sellers is 4690.50 – 4718.25 and 4664.25 – 4630.25.

Look for a choppy two-sided trade if the index gets trapped between 4630.25 and 4718.25.

A strong upside bias could begin on a sustained move over 4718.25. Look for the downside bias to resume on a sustained move under 4630.25.