E-mini Dow Flatlining on 50% Level Ahead of Earnings Reports

June E-mini Dow Jones Industrial Average futures are edging higher early Tuesday after posting a mixed trade, lower close the previous session. Blue chip stocks were choppy on Monday as investors contrasted Bank of America’s positive earnings with surging bond yields ahead of further earnings cues this week.

At 05:00 GMT, June E-mini Dow Jones Industrial Average futures are trading 34418, up 105 or +0.31%. On Monday, the SPDR Dow Jones Industrial Average ETF settled at $344.12, down $0.17 or -0.05%.

Monday Recap

Bank of America rounded out earnings season for the big Wall Street banks, reporting strong growth in its consumer lending business, although its investment banking unit took a hit from a slowdown in deal making.

The BoA news translated into strong gains for financial stocks and Dow components Goldman Sachs, JPMorgan Chase and American Express which rose 2.56%, 1.86% and 1.83%, respectively.

Higher crude oil prices helped boost shares of Chevron Corp 1.34%, while the technology sector was supported by Microsoft which gained 0.25%.

Looking Ahead …

Investors are bracing for a slew of earnings that will help them assess the impact of the Ukraine war and a spike in inflation on company financials. Dow components Johnson & Johnson and International Business Machines are both scheduled to report this week.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 34820 will change the main trend to up. A move through 34002 will signal a resumption of the downtrend.

The minor trend is also down. A trade through 34794 will change the minor trend to up. This will shift momentum to the upside.

The main range is 36708 to 32086. The market is currently straddling its 50% level at 34397.

The short-term range is 32086 to 35281. Its retracement zone at 33678 to 33301 is the nearest support.

Daily Swing Chart Technical Forecast

The direction of the June E-mini Dow Jones Industrial Average on Tuesday is likely to be determined by trader reaction to the 50% level at 34397.

Bullish Scenario

A sustained move over 34397 will indicate the presence of buyers. If this move starts to attract buyers then look for the rally to possibly extend into the minor top at 34794, the main top at 34820 and the main Fibonacci level at 34942.

Bearish Scenario

A sustained move under 34397 will signal the presence of sellers. If this move generates enough downside momentum then look for the move to possibly extend into the minor bottom at 34002.

Taking out 34002 will indicate the selling pressure is getting stronger. This could trigger a further break into the short-term retracement zone at 33678 to 33301.

Watch for a technical bounce on the first test of this retracement zone. Counter-trend buyers could try to form a potentially bullish secondary higher bottom. If 33301 fails as support, however, then look for an acceleration to the downside with 32578 the first major target.