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E-mini Dow Jones Industrial Average (YM) Futures Analysis – August 10, 2015 Forecast

By:
James Hyerczyk
Updated: Aug 10, 2015, 05:46 UTC

September E-mini Dow Jones Industrial Average futures sold off sharply on Friday, taking out the previous main bottom at 17319 and reaffirming the

Daily September E-mini Dow Jones Industrial Average

September E-mini Dow Jones Industrial Average futures sold off sharply on Friday, taking out the previous main bottom at 17319 and reaffirming the downtrend. The market traded as low as 17221 before enough buying came in to drive the market back over the previous bottom. This suggests the selling pressure was triggered by sell stops and weak shorting. It also indicates that aggressive buyers may have found a short-term value area.

Daily September E-mini Dow Jones Industrial Average
Daily September E-mini Dow Jones Industrial Average

If Friday’s rebound rally created enough upside momentum into the close then look for a follow-through rally today. The first upside target is a downtrending angle at 17531. This is an important angle because it stopped the market last week at 17721. It is also a trigger point for an upside breakout with the next target the aforementioned main top at 17721.

A trade through 17721 will turn the main trend to up on the daily chart. This could trigger a further rally into the next downtrending angle at 17803.

If there is no follow-through rally today then look for sellers to go after Friday’s low at 17221. A sustained move under this bottom could trigger a break into the major 50% level at 17005. Crossing to the weak side of the steep downtrending angle at 16987 will put the Dow in an extremely bearish position with the major Fibonacci level at 16711 the next likely target.

The direction of the market today will likely be determined by trader reaction to 17221. Three scenarios could take place today. One, buyers will come in to defend 17221, triggering a short-covering rally. Two, sellers will take out this level with conviction and trigger an acceleration to the downside. And three, sellers will take out 17221, but buyers will come back in with enough force to form a potentially bullish closing price reversal bottom. This could trigger the start of a 2 to 3 day short-covering rally. 

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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