E-mini Dow Jones Industrial Average (YM) Futures Analysis – August 25, 2017 Forecast

September E-mini Dow Jones Industrial Average futures are trading higher shortly before the cash market opening. The market is inside yesterday’s range which suggests investor indecision and impending volatility.

The market is set up for a breakout but the volume is bad so we’re more likely to see whip-saw action before traders settle on a direction.

We’ve been hearing all week about Jackson Hole and speeches by Fed Chair Janet Yellen and ECB President Mario Draghi. However, we’ve also been hearing that they aren’t expected to say anything major at this time.

I do think that if Yellen is dovish then stocks are likely to rally. The market doesn’t believe a rate hike is coming in December and I don’t think Yellen does either so her speech seems to be just a formality. If stocks don’t rally then it probably won’t be because of Yellen’s message, but because the market is overvalued.

Technical Analysis

The main trend is down according to the daily swing chart. However, momentum is close to turning up. A trade through 21900 will change the minor trend to up. A move through 22067 will turn the main trend to up. A trade through 21579 will signal a resumption of the downtrend.

Forecast

Based on the current price at 21827, the direction of the Dow is likely to be determined by trader reaction to 21823.

A sustained move over 21823 is likely to lead to a labored rally with potential targets lined up at 21856, 21881, 21900 and 21921.

The trigger point for an upside breakout is 21921. The daily chart is wide open to 22067.

A sustained move under 21823 will signal the presence of sellers. This could generate the downside momentum needed to challenge 21740 to 21702.

Look for an acceleration to the downside if 21702 fails as support. The next target is 21579.

Watch the price action and read the order flow at 21823 all session. Trader reaction to this price will tell us if the bulls or bears are in control.