E-mini S&P 500 Trying to Build on Monday’s Reversal Bottom
Posted On May 4, 2022
June E-mini S&P 500 Index futures closed higher on Tuesday after a choppy session in which the benchmark index fluctuated between gains and losses as a key meeting of the Federal Reserve got under way.
The price action showed investors were buying shares of financials and technology companies ahead of Wednesday’s expected announcement by the Fed.
June E-mini S&P 500 Index futures settled at 4169.25, up 18.25 or +0.44%. The S&P 500 Trust ETF (SPY) finished at $416.39, up $1.91 or +0.46%.
Nine of the 11 major S&P 500 sectors rose, with energy and financials up 2.9% and 1.3%, respectively. The S&P 500 banks index gained 2%, with Citigroup Inc climbing 2.9%.
Eyes on Federal Reserve
The U.S. central bank is seen
raising interest rates by 50 basis points and announce plans to reduce its $9 trillion balance sheet when it concludes its two-day meeting on Wednesday.
However, the spotlight will be on Fed Chair Jerome Powell’s news conference for comments on the future path of interest rates and balance sheet reduction.
Daily June E-mini S&P 500 Index
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. However, momentum has been trending higher since the confirmation of Monday’s closing price reversal bottom.
A trade through 4056.00 will negate the chart pattern and signal a resumption of the downtrend. A move through 4509.00 will change the main trend to up.
The minor trend is also down. A trade through 4303.50 will change the minor trend to up. This will confirm the shift in momentum.
The first minor range is 4303.50 to 4056.00. Its pivot is 4179.75.
The second minor range is 4509.00 to 4056.00. Its pivot is 4282.50.
The short-term range is 4631.00 to 4056.00. If the minor trend changes to up then its pivot at 4343.50 will become the next target.
The direction of the June E-mini S&P 500 Index early Wednesday is likely to be determined by trader reaction to 4179.75.
A sustained move over 4179.75 will indicate the presence of buyers. If this move creates enough upside momentum then look for a possible surge into the resistance cluster at 4282.50 – 4303.50.
A sustained move under 4179.75 will signal the presence of sellers. The first downside target is a minor pivot at 4197.75. If this fails then look for a retest of the reversal bottom at 4056.00.