E-mini Dow Jones Industrial Average (YM) Futures Analysis – August 22, 2017 Forecast

September E-mini Dow Jones Industrial Average futures are trading sharply higher shortly after the opening. Traders are responding to a speech by President Trump on the war in Afghanistan as well as oversold conditions and increased demand for risky assets.

Technical Analysis

The main trend is down according to the daily swing chart. The rally is strong, but not strong enough to shift momentum to the upside. It has, however, helped produce a new minor bottom at 21579.

The first range is 22067 to 21579. Its retracement zone is 21823 to 21881.

The second range is 22132 to 21579. Its retracement zone is 21856 to 21921.

The two zone combine to form a potential resistance cluster at 21856 to 21881.

Forecast

Based on the current price at 21803, the direction of the Dow the rest of the session is likely to be determined by trader reaction to the downtrending angle at 21812.

The inability to overcome 21812 will indicate the presence of sellers. This could trigger the start of a retracement of the rally from 21579.

Crossing to the strong side of the downtrending angle at 21812 will signal the presence of buyers. This could lead to a labored rally because of potential resistance levels at 21823, 21856, 21881 and 21921. If buyers can overtake all of these levels then the rally could extend into the downtrending angle at 21972.

Since the main trend is down, sellers may show up on a test of the retracement levels. They are going to defend the trend while trying to produce a secondary lower top.