E-mini S&P 500 Index (ES) Futures Technical Analysis – Early Pressure Ahead of Pelosi’s Taiwan Visit

September E-mini S&P 500 Index futures are expected to open lower on Tuesday as investors lightened up on the long-side on heightened tensions between the United States and China over an expected visit to Taiwan by House Speaker Nancy Pelosi later today.

Also weighing on the benchmark index are shares of Caterpillar after the company reported earnings that missed revenue expectations, sending the stock down more than 3% before the bell.

Traders are also awaiting another set of earnings reports from companies such as Starbucks, PayPal and Advanced Micro Devices.

At 13:16 GMT, September E-mini S&P 500 Index futures are trading 4103.00, down 17.50 or -0.42%.

Early Focus on Pelosi Trip to Taiwan

Pelosi was expected to visit Taiwan and spend Tuesday night there, Reuters reported, citing sources. Leading up to the trip, Chinese official threatened to take action if Pelosi moved forward with the visit.

JPMorgan Says Stocks May Move Higher After Pelosi Lands in Taiwan

Stock markets may shrug off House Speaker Nancy Pelosi’s visit to Taiwan Tuesday, especially if there is no immediate reaction from China, JPMorgan wrote in a Tuesday note.

“Today, Pelosi’s plane is scheduled to land about an hour after the U.S. opens; if there is no immediate reaction you may see markets move higher, JPMorgan analysts wrote.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, momentum shifted lower following the confirmation of Monday’s closing price reversal top.

A trade through 4147.25 will signal a resumption of the uptrend. A move through 3723.75 will change the main trend to down.

The minor trend is also up. A trade through 3913.25 will change the minor trend to down. This will confirm the shift in momentum.

On the upside, the nearest resistance is a long-term 50% level at 4169.25. On the downside, the nearest support is a minor pivot at 4030.25, followed by the Fibonacci level at 3988.50.

Daily Swing Chart Technical Forecast

Trader reaction to 4115.50 is likely to determine the direction of the September E-mini S&P 500 Index on Tuesday.

Bearish Scenario

A sustained move under 4115.50 will indicate the presence of sellers. If this creates enough downside momentum then look for a break into the minor pivot at 4030.25. If this level fails as support, the selling could extend into 4988.50.

Bullish Scenario

A sustained move over 4115.50 will signal the presence of buyers. If this generates enough upside momentum then look for a test of 4147.25. A trade through this level will resume the uptrend with 4169.25 the next major target level.