E-mini Dow Jones Industrial Average (YM) Futures Analysis – August 25, 2016 Forecast

September E-mini Dow Jones Industrial Average futures are trading lower and in a position to break even further as investors probe the support side of a tight trading range. Trading conditions are thin with the major players on the sidelines ahead of Fed Chair Janet Yellen’s speech on Friday so it’s not going to be hard to trigger sell-stops under the support since momentum is taking over and there are no major sell-stoppers in the market.

The main trend is down according to the daily swing chart. The trade through the 18442 swing bottom on Wednesday changed the main trend to down. The price action suggests investors are looking for value. Anybody who bought strength earlier in the week got caught in a bull trap.

You’ll notice too that when volume drops breakout attempts to the upside often fail because there are no buyers behind the move. We’ll find out today if sellers or sell stops are behind the weakness today. If we see another spike lower and a higher close, then well know that a small group of traders are manipulating the market this week, just trying to create enough volatility to pull-off a few day trades.

There’s nothing wrong with that because how else are day-traders going to make money if the market doesn’t move?

The early price action indicates the direction of the market today is likely to be determined by trader reaction to the uptrending angle at 18442.

A sustained move under 18442 will indicate the presence of sellers. This could trigger a break into the retracement zone at 18392 to 18340. This is the first value zone. If buyers are going to come in today, then they are going to come in on a test of this zone. This could trigger a rebound rally and perhaps a retracement of the entire day, leading to reversal and a higher close.

If the selling continues under the retracement zone then look for a test of the price cluster at 18559.

Overtaking the angle at 18442 will signal the presence of buyers. This could lead to a test of the downtrending angle at 18495. This is a trigger point for an upside breakout into 18559.

We’re looking for early weakness with the main target zone 18392 to 18340. We could see the start of a two-sided trade today if aggressive counter-trend buyers come in on a test of this zone.

Volume is low so be careful selling weakness and buying strength.