E-mini S&P 500 Index (ES) Futures Technical Analysis – Reversal Top Will Put 4004.75 on Radar

The response of traders at 4155.75 will most likely influence the direction of the June E-mini S&P 500 Index into Tuesday's closing.

Soaring oil prices and hawkish remarks from a Federal Reserve official worried investors, and June E-mini S&P 500 Index futures were trading substantially down immediately after the cash market opened on Tuesday.

At 13:49 GMT, the benchmark index was trading at 4109.25, down 46.50 points or 1.12%. The S&P 500 Trust ETF (SPY) is now trading at $410.89, down $4.37 or 1.05 percent from its previous close.

A decline in European equities overnight weighed on the market as Brent crude oil rose beyond $123 a barrel. The European Union's decision to partly ban Russian oil and China's decision to eliminate certain COVID-19 limitations were the drivers for the surge.

Sellers were also responding to a Fed official's hawkish remarks. Governor Christopher Waller of the Federal Reserve said on Monday that the US central bank should be prepared to hike rates by a half percentage point at each meeting from now on until inflation is well controlled.

Investors are now waiting for the result of President Joe Biden's meeting with Federal Reserve Chair Jerome Powell later in the day.

Technical Analysis of the Daily Swing Chart

According to the daily swing chart, the major trend is up. The early price action, on the other hand, shows that momentum is about to move to the negative.

The return of the uptrend will be signaled by a trade through 4202.25. The major trend will shift to the downside if the price breaks through 3807.50.

The midpoint is between 4509.00 and 3807.50. The advance at 4202.25 earlier in the session was halted by its retracement zone around 4158.25 to 4241.00.

3807.50 to 4202.25 is the short-term range. The next negative objective is the retracement zone between 4004.75 to 3958.25.

Technical Forecast for the Daily Swing Chart

The response of traders at 4155.75 will most likely influence the direction of the June E-mini S&P 500 Index into Tuesday's closing.

Scenario that is bearish

The presence of sellers will be shown by a persistent move below 4155.75. Look for selling pressure to continue into 4004.75 to 3958.25 if this move is able to build enough bearish momentum.

Possibilities for Growth

The presence of buyers will be signaled by a prolonged advance over 4155.75. Overtaking 4158.25 will signal that the purchasing is becoming more powerful. This might provide the necessary upward impetus to surpass 4202.25 and challenge the Fibonacci level at 4241.00.