E-mini Dow Jones Industrial Average (YM) Futures Analysis – August 31, 2015 Forecast
There could be a little volatility on the opening today if September E-mini Dow Jones Industrial Average futures traders believe the Fed is still on track for an interest rate hike in 2015. Over the week-end, Fed Vice Chair Stanley Fischer put this thought into traders’ heads when he told a crowd of central bankers at the Jackson Hole symposium that while the Fed is aware of the recent volatility in the financial markets, it should not derail the possibility of a rate hike before the end of the year.
Fischer went on to say that the Fed is watching labor and inflation. This puts a lot of emphasis on Friday’s U.S. Non-Farm Payrolls report. If the report is better than expected then the timeline for a rate hike could be moved forward. This could be bearish for stocks.
Traders should also watch for volatility early Tuesday, following the release of a pair of manufacturing PMI reports out of China.
Technically, the main trend is up on the daily chart. The main range is 17535 to 15285. Its retracement zone is 16410 to 16676. The market is currently testing this zone.
A sustained move through the Fibonacci level at 16676 will signal the presence of buyers. This could trigger a rally into the next angle at 16959. This is followed by another angle at 17247 over the near-term.
Crossing to the weak side of the 50% level at 16410 will signal the presence of sellers. The daily chart is wide open under this level with the next likely downside target an uptrending angle at 15925.
Based on the close at 16659 on Friday, the first read today will come in at 16676. Read the order flow and watch the price action at this level. It will tell us whether the bulls or the bears are in control today.