Advertisement
Advertisement

E-mini Dow Jones Industrial Average (YM) Futures Analysis – October 28, 2016 Forecast

By:
James Hyerczyk
Updated: Oct 28, 2016, 21:17 UTC

The initial reaction to the U.S. Advance GDP report has the December E-mini Dow moving higher shortly before the cash market opening. It is recovering

e-mini-dow-jones-industrial-average

The initial reaction to the U.S. Advance GDP report has the December E-mini Dow moving higher shortly before the cash market opening. It is recovering from early weakness so if it can sustain the current rally, we could see a strong move to the upside because the price action suggests strong buying on the dip.

Traders were looking for a reading of 2.5 percent in the report, the number came in at 2.9 percent. However, the range of guesses was 1.3% to 3.6%. This creates plenty of room for surprises. The Commerce Department will also revise the previous report which opens up the market for a possible two-sided trade. Additionally, there are several components to the report so it may take time for investors to digest the entire report. This also opens up the trade to excessive volatility, fueled by two-sided trading.

I’m telling you this because it’s easy to read the headline of this report and get strongly influenced by it. The temptation is to trade the headline, but in reality you have to be flexible and willing to trade both sides of the market.

Technical Analysis

The main trend is down according to the daily swing chart. The main trend will turn up on a trade through 18320. A trade through 18197 will turn the minor trend to up.

Two minor bottoms come in at 17975 and 17965. A trade through 17868 will signal a resumption of the downtrend with the September 12 main bottom at 17822 the next target.

The main range is 18468 to 17822. Its 50% level or pivot is 18145. This price is controlling the longer-term direction of the market.

The short-term range is 17868 to 18197. Its pivot or 50% level at 18033 has been acting like support.

daily-december-e-mini-dow-jones-industrial-average
Daily December E-mini Dow Jones Industrial Average

Forecast

Based on the current price at 18105 and the early price action, the direction of the Dow today is likely to be determined by trader reaction to the two pivot prices.

The first upside target today is the long-term pivot at 18145. Overtaking this level will indicate the buying is getting stronger with the next targets a pair of downtrending angles at 18180 and 18208. Overtaking these two levels will put the market in a position to challenge the uptrending angle at 18220.

Crossing to the strong side of the angle at 18220 will put the Dow in a bullish position with 18320 and 18324 the next two targets.

The inability to overcome 18145 will indicate the presence of sellers. The nearest downside targets are 18096, 18044 and 18033.

Taking out 18033 will indicate the selling is getting stronger with the next target angle coming in at 17956. This is followed closely by an uptrending angle at 17912. This is the last potential support angle before the 17868 main bottom.

Essentially, we’ll be watching 18145 on the upside and 18033 on the downside. These two 50% levels are the trigger points for the breakout moves. Trading inside these two levels are likely to produce a choppy, two-sided trade.

 

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

Did you find this article useful?

Advertisement