E-mini S&P 500 Index (ES) Futures Technical Analysis – Reaction to 3975.00 – 3946.50 Sets Near-Term Tone

The three-day rise in June E-mini S&P 500 Index futures collapsed under the weight of a dismal performance in Target shares soon before the mid-session on Wednesday.

Target Corp's shares dropped 25.1 percent to the bottom of the S&P 500 index after the firm's first-quarter earnings was halved and the company warned of a worse margin impact due to increased fuel and freight expenses.

June E-mini S&P 500 Index futures were trading at 4009.50 at 14:58 GMT, down 75.25 or 1.84 percent. The S&P 500 Trust ETF (SPY) is down $7.64, or 1.87 percent, to $400.68.

Target's lead was followed by other retail growth companies, although not to the same extent. Other retailers' stocks fell between 4.1 percent and 11.8 percent, including Walmart Inc, Gap Inc, Kohl's Corp, Nordstrom Inc, Costco, Best Buy, Macy's Inc, and Dollar General Corp.

In early trading, all 11 main S&P sectors fell, with consumer staples and consumer discretionary down 3.5 percent apiece.

Technical Analysis of the Daily Swing Chart

According to the daily swing chart, the major trend is down. The return of the decline will be signaled by a trade through 3855.00. The major trend will turn to up if 4303.00 is broken.

4303.00 to 3855.00 is the short-term range. Its retracement zone of 4079.00 to 4132.00 halted the surge at 4095.00 earlier today.

3855.00 to 4095.00 is the minor range. The next negative objective is the retracement zone from 3975.00 to 3946.75.