E-mini Dow Jones Industrial Average (YM) Futures Analysis – April 26, 2017 Forecast

The June E-mini Dow Jones Industrial Average surged to its highest level since March 2 earlier in the session, before turning lower shortly before the regular session opening. Today is only the fifth day up from the recent main bottom, however, when a market goes vertical, it almost always ends with a dramatic closing price reversal top. And that what we’ll be looking for today.

Given that the market is being driven by strong earnings and anticipation of President Trump’s long-awaited tax reform plan, we could be looking at a “buy the rumor, sell the fact” situation. In other words, we believe the tax plan has been factored into the price so investors may decide to take profits after its released especially if the plan disappoints.

We’ve already had the higher-high, so all we need is a lower close to set up the Dow for a possible 2 to 3 correction.

Technical Analysis

The main trend is up according to the daily swing chart. Given the breakout over 20981 earlier, our next major upside target is the contract high at 21106.

On the downside, the old top at 20828 is the first support, followed by the Fibonacci level at 20802 and the 50% level at 20709.

Forecast

Based on the current price at 20936 and the earlier price action, the direction of the Dow today is likely to be determined by trader reaction to yesterday’s close at 20945.

A sustained move over 20945 will signal the presence of buyers. A sustained move under 20945 will indicate the selling is greater than the buying at current price levels. This could trigger the start of a 2 to 3 correction if confirmed on Thursday.