E-mini Dow Jones Industrial Average (YM) Futures Analysis – May 27, 2016 Forecast

June E-mini Dow Jones Industrial Average futures are trading flat and in a tight and narrow range as investors await today’s U.S. preliminary GDP report at 1230 GMT and comments from Fed Chair Janet Yellen later today. Both events could cause some volatility.

The main trend is up according to the daily swing chart. It turned up on Wednesday, but the market has struggled to maintain the upside momentum since then because of investor reluctance to buy strength so close to major tops.

The main range is 18083 to 17297. Its retracement zone is 17783 to 17690. The market is currently trading on the strong side of this zone which is giving it an upside bias. This area should be treated as support.

If a short-term range develops between 17297 and 17869 then its retracement zone at 17583 to 17516 will become the primary downside target.

Based on yesterday’s close at 17817 and the current price action, the direction of the market is likely to be determined by trader reaction to the long-term downtrending angle at 17867.

A sustained move over 17867 will indicate the presence of buyers. This could generate enough upside momentum to challenge the next downtrending angle at 17975. This is the last potential resistance angle before the April 27 main top at 18006 and the April 20 main top at 18083.

The inability to overcome or sustain a rally over 17867 will indicate the presence of sellers. The first target is the main Fib level at 17783.

The daily chart opens up to the downside under 17783 with the next major target a potential support cluster at 17690 to 17681. There may be a technical bounce on the first test of this area, but if it fails the market is likely to continue down into the short-term 50% level at 17583.

Watch the price action and read the order flow at 17867 today. Trader reaction to this angle is likely to tell us if the bulls or the bears are in control today.