E-mini Dow Jones Industrial Average (YM) Futures Analysis – August 23, 2016 Forecast

September E-mini Dow Jones Industrial Average futures are expected to open higher based on the pre-market trade. The market is currently in a position to take out a previous main top which could give it enough upside momentum today to challenge the contract high. Given the current trading conditions, this will all depend on the volume, since it appears that it is a little thin this week ahead of Fed Chair Janet Yellen’s speech on Friday.

Even if there is a breakout to the upside, the move is not likely to last if the big boys (funds and institutions) are on the sidelines.

TECHNICAL ANALYSIS

TREND INDICATOR SWING CHART

The main trend is up according to the daily swing chart. A trade through 18623 will signal a resumption of the uptrend. A trade through 18442 will turn the main trend to down.

RETRACEMENT ZONES

The main range is 18170 to 18623. Its retracement zone is 18397 to 18343. This is the primary downside target.

The new short-term range is 18623 to 18442. Its 50% level or pivot is 18533. The Dow surged through this level during the pre-market session, giving it an early upside bias. This pivot will likely control the direction of the Dow the rest of the session.

GANN ANGLES

On the upside, the key resistance angle comes in at 18575. This is followed by a downtrending angle at 18599. This is the last potential support angle before the 18623 main top.

The early trade indicates that the nearest support angle comes in at 18527. A break back under this angle later today will indicate that the early rally has failed.

WHAT TO DO TODAY

Based on the current price at 18563, the direction of the September E-mini Dow Jones Industrial Average futures contract is likely to be determined by trader reaction to the downtrending angle at 18575. This angle forms a potential resistance cluster with the main top at 18576, however, it is also the trigger point for an acceleration to the upside. Watch the price action and read the order flow at 18575 to 18576 today.

If taken out then repeat the process on a test of 18599 because taking out this angle will mean we’re going to at least 18623.

Look out below if 18527 fails as support since there is nothing to stop the Dow from breaking back to 18442, followed closely by 18410.