E-mini S&P 500 Index (ES) Futures Technical Analysis – Trader Reaction to 4142.25 Sets Near-Term Tone

June E-mini S&P 500 Index futures are trading lower late in the session on Monday amid concerns over extremely high valuations. After hitting a record high on Friday, investors are now awaiting solid guidance from the next round of first-quarter earnings to justify the record prices.

At 18:51 GMT, June E-mini S&P 500 Index futures are trading 4152.25, down 24.00 or -0.58%.

The benchmark index was mostly lower, with the consumer staples and real estate sectors trading near break-even, as analysts await results this week from 79 companies in the benchmark, including Johnson & Johnson, Netflix Inc, Intel Corp, Honeywell and Schlumberger.

Tesla Inc shares fell following a fatal car crash. The electric-car maker was down 3.32% after a Tesla vehicle believed to be operating without anyone in the driver’s seat crashed into a tree on Saturday north of Houston, killing two occupants.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 4183.50 will signal a resumption of the uptrend.  The main trend will change to down on a trade through 3843.25.

The minor trend is also up. A trade through 4101.25 will change the minor trend to down. This will shift momentum to the downside.

The minor range is 4101.25 to 4183.50. Its 50% level at 4142.25 is potential support. This level was tested successfully earlier in the session.

The main range is 3843.25 to 4183.50. If the minor trend changes to down then its retracement zone at 4013.25 to 3973.25 will become the primary downside target area.

Daily Swing Chart Technical Forecast

The direction of the June E-mini S&P 500 Index futures contract into the close will be determined by trader reaction to 4142.25.

Bullish Scenario

A sustained move over 4142.50 will indicate the presence of buyers. If this move creates enough upside momentum then look for the move to possibly extend into 4162.75. Overtaking this level could lead to a retest of the minor top at 4183.50.

Bearish Scenario

A sustained move under 4142.25 will signal the presence of sellers. If this move creates enough downside momentum then look for a possible break into the main bottom at 4101.25.