E-mini S&P 500 Index (ES) Futures Technical Analysis – Gap Lower Opening Puts 3810.00 on Radar

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September E-mini S&P 500 Index futures are down sharply after gapping lower on the daily and weekly charts. The price action indicates investors are still being spooked by the hotter-than-expected U.S. inflation report released on Friday. That data came in ahead of a highly anticipated Federal Reserve meeting this week, with the central bank expected to announce at least a half-point rate hike on Wednesday.

At 04:14 GMT, September E-mini S&P 500 Index futures are trading 3851.50, down 49.00 or -1.26%. On Friday, the S&P 500 Trust ETF (SPY) settled at $389.82, down $11.62 or -2.90%.

Investors fear inflation is far from peaking, which will likely lead to a more hawkish Federal Reserve, and higher recession risk.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum has been trending lower since May 31.

A trade through 3810.00 will change the main trend to down. A move through 4204.75 will signal a resumption of the uptrend.

The minor trend is also down. This is controlling the momentum.

The short-term range is 3810.00 to 4204.75. The index is currently trading on the weak side of its retracement zone at 3960.75 to 4007.50, making it resistance.

Daily Swing Chart Technical Forecast

Trader reaction to 3900.50 will likely determine the direction of the September E-mini S&P 500 Index early Monday.

Bearish Scenario

A sustained move under 3900.50 will indicate the presence of sellers. If this continues to generate enough downside momentum then look for the selling to possibly extend into the main bottom at 3810.00.

We could see a technical bounce on the first test of 3810.00. However, if it fails, we could see an acceleration to the downside with the March 4, 2021 main bottom at 3678.75 the next likely target price.

Bullish Scenario

A sustained move over 3900.50 will signal the presence of buyers. This could trigger a short-covering or bottom-picking rally into 3960.75 to 4007.50.

Sellers could re-enter on a test of 3960.75 to 4007.50, but taking out the latter could trigger an acceleration to the upside with the first target yet to be determined.

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

This article was originally posted on FX Empire

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