E-mini Dow Jones Industrial Average (YM) Futures Analysis – 25781 Pivot Controlling Early Price Action

September E-mini Dow Jones Industrial Average futures are trading lower early Wednesday but well off its low as investors attempt to claw back an earlier triple-digit loss.

At 0400 GMT, the E-mini Dow is trading 25763, down 44 or -0.17%.

The early selling was a knee-jerk reaction to the news that President Trump’s former lawyer, Michael Cohen, pleading guilty on Tuesday, said a candidate for federal office directed him to pay off a porn star “for the principal purpose of influencing” the election.

Investors took a “sell first, ask questions later” approach as they sorted out the details that could development into something bearish further down the road. Right now, investors should be concerned that the President may be preoccupied by legal issues that could stall his economic plans.

We could see some volatility as professionals try to figure out how to hedge against the worst case scenario.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 25885 will signal a resumption of the uptrend. Yesterday, the Dow traded through its highest level since February 27 at 25868.

There is no immediate danger of a change in trend, but there is room to the downside for a correction. The short-term range is 24955 to 25885. Its retracement zone at 25420 to 25310 is a potential downside target.

The minor trend is also up, but the early price action made 25885 a new minor top.

Daily Swing Chart Technical Forecast

Based on the early price action, it looks as if we’re going to have a news driven day. Firstly, we have the Trump news, secondly, we have the Fed minutes late in the session.

If we’ve seen the worst of the selling then we’re likely to sit inside a trading range until the minutes come out at 1800 GMT.

Since today is likely to be all about momentum, traders are likely to watch trader reaction to yesterday’s close at 25807 and today’s intraday low at 25677.

We’re going to take a simple approach and look for increased buying if the Dow turns higher for the session, and look for increased selling if traders take out the earlier low. Things could get choppy inside 25807 to 25677.