E-mini Dow Jones Industrial Average (YM) Futures Analysis – September 29, 2016 Forecast

December E-mini Dow Jones Industrial Average futures are trading higher at 0952 GMT. There was very little follow-through to the upside following yesterday’s late session rally. The overnight gain from high to high was only 19 points. This makes one wonder if Wednesday’s move was fueled by short-covering or real buying.

The move happened so fast that I think it was short-covering. Since it was a surprise decision by OPEC to make a deal to curb production, shorts paid anything to get out. I didn’t see a lot of investors calculating value on the way up.

So that brings us to today’s session. The real question is will be see the same upside momentum once investors realize that the OPEC deal lacks details and is not going to take place until at least November when the cartel meets for more formal talks about production.

A lot can happen between now and November including a formal filing by the U.K. to leave the European Union and, did I mention, the U.S. Presidential election. Next week, we even have the next Non-Farm Payrolls report to deal with. Therefore, I am not so sure that investors are going to return to today’s session with their wallets opened wide.

TECHNICAL ANALYSIS

The main trend is down according to the daily swing chart, but momentum has shifted to the upside. Additionally, the Dow is trading on the strong side of the main 50% level.

A trade through 18366 turns the minor trend to up. A move through 18468 will change the main trend to up.

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

FORECAST

BASED ON THE LAST PRICE AT 18272 AND THE EARLIER PRICE ACTION, THE DIRECTION OF THE E-MINI DOW JONES INDUSTRIAL AVERAGE FUTURES CONTRACT IS LIKELY TO BE DETERMINED BY TRADER REACTION TO THE DOWNTRENDING ANGLE AT 18228.

A SUSTAINED MOVE OVER 18228 WILL INDICATE THE PRESENCE OF BUYERS. THIS COULD GENERATE ENOUGH UPSIDE MOMENTUM TO CHALLENGE THE NEXT RESISTANCE ANGLE AT 18348. THIS IS THE LAST POTENTIAL RESISTANCE ANGLE BEFORE THE 18366 MINOR TOP.

THE MINOR TOP AT 18366 IS THE TRIGGER POINT FOR THE NEXT RALLY INTO AN ANGLE AT 18408. THIS IS THE LAST POTENTIAL RESISTANCE ANGLE BEFORE THE 18468 MAIN TOP.

A SUSTAINED MOVE UNDER 18228 WILL SIGNAL THE PRESENCE OF SELLERS. THE DAILY CHART OPENS UP UNDER THIS ANGLE WITH THE NEXT TARGET THE MAIN PIVOT AT 18145.

THINGS COULD GET PRETTY UGLY IF 18145 FAILS AS SUPPORT SINCE THE NEXT MAJOR SUPPORT ANGLE DOESN’T COME IN UNTIL 2136.75.

WATCH THE PRICE ACTION AND READ THE ORDER FLOW AT 18228 TODAY. TRADER REACTION TO THIS ANGLE WILL TELL US IF THE BUYING IS GETTING STRONGER OR IF THE SELLERS ARE REGAINING CONTROL.