E-mini Dow in Position to Post Closing Price Reversal Top

June E-mini Dow Jones Industrial Average futures are trading lower on Wednesday after giving up earlier gains. The move is being driven by another surge in crude oil prices, which is renewing inflation fears.

Oil prices ticked higher on the day, with international oil benchmark Brent crude advancing about 4% on top $120 per barrel. U.S. crude gained more than 4% to about $114 per barrel.

At 14:47 GMT, June E-mini Dow Jones Industrial Average futures are trading 34456, down 253 or -0.73%. The SPDR Dow Jones Industrial Average ETF (DIA) is at $345.45, down $2.69 or -0.77%.

Higher oil prices are helping to boost Dow component Chevron Crop, which is up 0.96%. The biggest losers include Salesforce.Com, down by 3.49% and Home Depot, lower by 3.19%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, the early price action suggests momentum may be getting ready to shift to the downside.

A trade through the intraday high at 34792 will signal a resumption of the uptrend. A move through 32578 will change the main trend to down.

The main range is 36708 to 32086. The market is currently trading inside its retracement zone at 34397 to 34942. Trader reaction to this area could determine the near-term direction of the E-mini Dow.

The short-term range is 35649 to 32086. Its retracement zone at 34288 to 33868 is potential support.

The minor range is 32578 to 34792. Its 50% level at 33685 is another potential support level.

Daily Swing Chart Technical Forecast

The direction of the June E-mini Dow Jones Industrial Average into the close on Wednesday is likely to be determined by trader reaction to 34709.

Bearish Scenario

A sustained move under 34709 will indicate the presence of sellers. The first downside target is the main 50% level at 34397, followed by the short-term Fibonacci level at 34288.

The Fib level at 34288 is a potential trigger point for an acceleration to the downside with the short-term 50% level at 33868 the next likely downside target.

Bullish Scenario

Holding 34288 to 34397 will signal the presence of buyers. But the E-mini Dow is going to have to recapture 34709 in order to show strength.

Recovering 34709 then overcoming the intraday high at 34792 will indicate the buying is getting stronger. This could trigger a quick surge into the resistance cluster at 34942 to 34950. The latter is a potential trigger point for an acceleration to the upside.

Side Notes

A close under 34709 will form a closing price reversal top. If confirmed, this could trigger the start of a 2-3 day correction.