E-Mini Dow: Expecting Choppy Trade Ahead of Apple Earnings

June E-mini Dow Jones Industrial Average futures are edging higher early Wednesday, following yesterday’s steep sell-off, which was fueled by concerns of an economic slowdown. Helping to soften the blow from Tuesday’s plunge was Microsoft. The company announced earnings after the bell that beat across the board.

At 06:23 GMT, June E-mini Dow Jones Industrial Average futures are trading 33420, up 260 or +0.78%. On Tuesday, the SPDR Dow Jones Industrial Average ETF (DIA) settled at $332.29, down $8.27 or -2.43%.

Microsoft Beat Expectations on Top and Bottom Lines

Microsoft shares surged as much as 6% in extended trading on Tuesday after the software maker issued fiscal third-quarter earnings that exceeded analysts’ expectations and an optimistic outlook for the current quarter.

More Volatility Ahead

Dow components Apple and Boeing are set to report earnings on Wednesday. Additionally, on the economic front, investors will be watching for the latest data on weekly mortgage applications, international trade and pending home sales.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 33081 will signal a resumption of the downtrend. A move through 35413 will change the main trend to up.

The minor trend is down. A change through 34038 will change the minor trend to up. This will shift momentum to the upside.

The short-term range is 32086 to 35413. The E-mini Dow is currently trading on the weak side of its retracement zone at 33357 to 33750, making it resistance.

Daily Swing Chart Technical Forecast

The direction of the June E-mini Dow Jones Industrial Average early Wednesday is likely to be determined by trader reaction to 33357.

Bullish Scenario

A sustained move over 33357 will indicate the presence of buyers. If this move is able to generate enough upside momentum then look for a surge into the short-term 50% level at 33750. Overtaking this level will put the E-mini Dow in a position to challenge the minor top at 34038.

Bearish Scenario

A sustained move under 33357 will signal the presence of sellers. This could lead to a retest of yesterday’s low at 33081.

Taking out 33081 will indicate the sellers have returned. This could trigger a steep decline into the next main bottom at 32578.

Side Notes

We expect to see some short-covering and position-squaring throughout the day ahead of the Apple earnings report. We don’t think new buyers are going to emerge ahead of those numbers.