E-mini S&P 500 Index (ES) Futures Technical Analysis – Trade Thru 3844.50 Puts 3759.50 on Radar

June E-mini S&P 500 Index futures are down sharply shortly before the cash market opening on Thursday. The price action suggests the market could see more downside pressure throughout the session as investors continue to fret over rising inflation and its impact on U.S. economic growth and corporate earnings.

At 11:59 GMT, June E-mini S&P 500 Index futures are trading 3897.00, down 25.75 or -0.66%. On Wednesday, the S&P 500 Trust ETF (SPY) settled at $168.40, up $0.07 or -0.04%.

On Wednesday, the benchmark index logged its biggest one-day percentage loss since June 2020 after dismal results from retailer Target Corp underscored just how hard inflation is biting consumers.

Looking ahead, the early downside momentum suggests prices could weaken further throughout today’s session. Additionally, the way the market erased this week’s earlier gains indicates that traders are in the “sell the rally” mode.

Longer-term, the outlook isn’t so bright either with corporate earnings and the U.S. economy expected to suffer further damage due to factors ranging from the severity of China’s pandemic lockdowns, the conflict in Ukraine and the U.S. Federal Reserve’s hawkish stance.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 3855.00 will signal a resumption of the downtrend, while a move through the March 24, 2021 main bottom at 3844.50 will reaffirm the downtrend. On the upside, the main trend will change to up on a trade through 4095.00.

The minor range is 3855.00 to 4095.00. Its retracement zone at 3947.00 to 3975.00 is resistance.

The short-term range is 4303.00 to 3855.00. Its retracement zone at 4079.00 to 4132.00 topped the rally earlier in the week at 4095.00.

Daily Swing Chart Technical Forecast

Trader reaction to 3922.75 is likely to determine the direction of the June E-mini S&P 500 Index on Thursday.

Bearish Scenario

A sustained move under 3922.75 will indicate the presence of sellers. The first downside targets are 3855.00 and 3844.50.

If 3844.00 fails then look for the selling to possibly extend into the March 8, 2021 main bottom at 3759.50.

Bullish Scenario

A sustained move over 3922.75 will signal the presence of buyers. This could trigger a quick move into 3946.75 to 3975.00. Look for sellers to return on a test of this zone.

Overtaking 3975.00, however, will indicate the buying is getting stronger with 4079.00 – 4095.00 the next potential upside target.