E-mini Dow Jones Industrial Average (YM) Futures Analysis – April 21, 2016 Forecast

June E-mini Dow Jones Industrial Average futures are called steady-to-better based on the earlier trade. If the upside momentum continues today then look for traders to try to take out yesterday’s high at 18083. We have to be careful about buying strength over this level because the market has settled well off its high the last two days.

The main trend is up according to the daily swing chart, however, the market is in the window of time for a potentially bearish closing price reversal top, i.e. higher-high, lower-close.

If buyers can sustain the move over 18083 then the next upside target is an uptrending angle at 18169. Crossing to the strong side of this angle will put the Dow in an extremely strong position.

The inability to overcome 18083 and sustain the move will signal the presence of sellers. The first downside objective is the May 19, 2015 main top at 17988. Crossing below this level will indicate that the last rally through it was fueled by short-covering or weak buying. Whatever the reason, anyone who bought strength over 17988 will be caught in a Bull Trap and that could lead to panic selling in the future.

A sustained move under 17988 could create enough downside momentum to challenge the nearest uptrending angle at 17907. Buyers may come in on a test of this angle, but taking it out will indicate the momentum is shifting to the downside. This could trigger a break into 17842.

Today will be all about momentum and whether buyers can sustain the rally above 18083. This is why we have to watch the price action and read the order flow at this level. Aggressive buyers are either going to take it out with conviction to keep the rally going, or the move is going to fail and a potentially bearish closing top will form.