E-mini S&P 500 Index (ES) Futures Technical Analysis – 4627.75 Potential Trigger Point for Steep Break
The direction of the December E-mini S&P 500 Index into the close on Wednesday is likely to be determined by trader reaction to 4627.75.
December E-mini S&P 500 Index shares are trading lower late Wednesday as surging consumer prices fueled fears of a longer-than-expected wave of heightened inflation dampened investor risk appetite. Of the 11 major sectors in the S&P 500, energy was the biggest percentage loser, while utilities were up the most. Additionally, the CBOE Volatility Index, a gauge of investor anxiety, touched its highest level in nearly one month.
At 20:04 GMT, December E-mini S&P 500 Index futures are trading 4637.50, down 40.75 or -0.87%.
In economic news, the Labor Department’s consumer price index (CPI), delivered a hotter-than-expected jump of 0.9% and the fastest year-on-year gain in 31 years. The report hinted that the persistently tangled global supply chain could result in the current inflation wave taking longer to abate than many – including the U.S. Federal Reserve – had hoped.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. A move through 4711.75 will signal a resumption of the uptrend. A move through 4260.00 will change the main trend to down.
The minor trend is also up. A trade through 4543.75 will change the minor trend to down. This will shift momentum to the downside.
The first minor range is 4543.75 to 4711.75. Its 50% level or pivot at 4627.75 is the first downside target. Since the main trend is up, buyers could come in on the first test of this level.
The second minor 50% level is 4514.50. This is followed by a retracement zone at 4485.75 to 4432.50. This is a value area that could prove to be attractive to new buyers.
Short-Term Outlook
The direction of the December E-mini S&P 500 Index into the close on Wednesday is likely to be determined by trader reaction to 4627.75.
Bullish Reaction
Since the main trend is up, buyers could come in on the first test of 4627.75. If successful, this could trigger a late session short-covering rally.
Bearish Reaction
A sustained move under 4627.75 will put the index in a weak position early Thursday. This could trigger an acceleration to the downside with the next major targets a minor bottom at 4543.75, followed by a series of retracement levels at 4514.50, 4485.75 and 4432.50.