E-mini S&P June futures recorded their first down session in 11, after a recent run-up that had left markets extended. Prices broke minor support at 7,575/7,565 and moved towards firmer levels around the prior all-time high at 7,540/7,535, with downside markers set below 7,530. A further move lower points to 7,515/7,505, with a deeper risk zone flagged under 7,495 and potential follow-through towards 7,445/7,440. On the upside, a move back through the record at 7,632 opens 7,640/7,650 and potentially 7,670/7,675.
E-mini Nasdaq June futures edged up to a fresh all-time high at 30,807, while price action also included a reversal that closed lower on the day. Near-term support is identified at 30,310/30,270, with stop levels below 30,210; additional downside zones are set at 30,150/30,130 and then 30,000/29,950, with a further marker below 29,850. E-mini Dow Jones June futures fell from a new high of 51,443 and retested 50,920/50,855 after Tuesday’s low, with levels referenced below 50,720; further support sits at 50,550/50,480, with another marker below 50,350.
Short-Term Consolidation and Levels to Watch
We believe there’s a good chance for a short-term sideways trading range after such significant recent gains. A consolidation is normal and helps to ease overbought conditions, as we saw with the first down day after 11 winning sessions. The key now is to be patient, as there is definitely no sell signal to justify gambling on a major downturn.
For S&P futures, we have broken minor support and are now testing the previous all-time high at 7540/7535. This pullback comes as the market digests the latest jobs report, which showed hiring slowed to 155,000 in May, easing fears of an overheating economy. Long positions need stops below 7530 to protect against a slide towards the 7515/7505 area.
On the Nasdaq, we hit a new all-time high at 30807 before reversing, which could mark the start of the expected consolidation. The market seems hesitant ahead of next week’s crucial Consumer Price Index (CPI) data, which will influence the Federal Reserve’s thinking on interest rates. We will watch short-term support at 30310/270, with stops on longs needed below 30210.
The Dow’s collapse from its new high at 51443 is more pronounced, and we are now re-testing support around 50920/50855. A break below 50720 would be a bearish signal, potentially targeting the 50550/480 level. This type of divergence, where one index shows more weakness than others, has historically preceded periods of choppy, range-bound trading.
Building Caution as Volatility Rises
The CBOE Volatility Index, or VIX, has ticked up from recent lows near 12 to just over 15, reflecting this budding uncertainty. This confirms our view that traders are becoming more cautious but are not yet outright bearish. If we see a recovery that breaks the all-time high at 7632 in the S&P, our next upside targets are 7640/50 and possibly 7675.
