E-mini S&P 500 Index (ES) Futures Technical Analysis – Price Action Suggests Momentum Shifting to Down

September E-mini S&P 500 Index futures are edging lower shortly after the mid-session on Friday as a weak performance in the technology sector weighed on the benchmark index. The catalysts behind the sell-off were poor performances by Twitter and Snap, which set off a wave of selling in social media stocks.

At 17:53 GMT, September E-mini S&P 500 Index futures are trading 3949.00, down 52.25 or -1.31%. The S&P 500 Trust ETF (SPY) is at $393.30, down $5.49 or -1.38%.

Dismal quarterly revenue from Twitter and Snap cast a bearish pall over the market early in the session. By the mid-session, Snap’s shares were down nearly 40%, Twitter was off by 1.2%.

Online ad giants Meta Platform Inc and Alphabet Inc tumbled 7.5% and 5.6%, respectively, weighing on the NASDAQ.

In economic news, a survey on Friday showed that U.S. business activity contracted for the first time in nearly two years in July, deepening concerns about an economy stunted by high inflation, rising interest rates and dwindling consumer confidence, according to Reuters.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, the intraday price action suggests momentum may be shifting to the downside.

A trade through 4016.25 will signal a resumption of the uptrend. A trade through 3723.75 will change the main trend to down.

The intermediate range is 4204.75 to 3639.00. The index is currently testing its retracement zone at 3821.75 to 3988.75.

The minor range is 3723.75 to 4016.25. Its 50% level at 3870.00 is a potential downside target.

The short-term range is 3639.00 to 4016.25. Its retracement zone at 3815.00 to 3773.50 is the last potential support before the major bottom at 3639.00.

Short-Term Outlook

Trader reaction to 4001.25 is likely to determine the direction of the September E-mini S&P 500 Index into the close on Friday.

Bearish Scenario

A sustained move under 4001.25 will indicate the presence of sellers. Taking out the Fibonacci level at 3988.50 will indicate the selling pressure is getting stronger. This could lead to a test of the 50% level at 3921.75.

A trade through 3931.75 could trigger an acceleration into the minor pivot at 3870.00.

Bullish Scenario

A sustained move over 4001.25 will signal the presence of buyers. Taking out the intraday high at 4016.25 will reaffirm the uptrend and could trigger an acceleration to the upside.

Side Notes

A close under 4001.25 will form a potentially bearish closing price reversal top. If confirmed, this could trigger the start of a 2 to 3 day correction.