E-mini Dow Jones Industrial Average (YM) Futures Analysis – Counter-Trend Rally Strengthens Over 24824

E-mini Dow Jones Industrial Average futures are inching higher on Thursday after a steep plunge the previous session. The Dow tried to rally early in the session and was actually trading higher shortly after the opening before sellers took control. After establishing resistance at a key 50% level at 25233, the market dropped sharply into the Fibonacci level at 24824. The market accelerated to the downside when sellers took out this level.

At 0551 GMT, December E-mini Dow Jones Industrial Average futures are trading 24652, up 36 or +0.15%.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. Given the prolonged move down in terms of price and time, the only chart pattern that could put an immediate halt to the sell-off is a closing price reversal bottom.

A trade through 24511 will indicate the selling is getting stronger. The next major targets are the June 28 bottom at 24000, the May 3 bottom at 23580 and the April 4 bottom at 23500.

The minor trend is also down. A trade through 25338 will change the minor trend to up. This will shift momentum to the upside with 25845 the next major upside target.

Taking out 24511 then turning higher for the session will indicate the buying is greater than the selling at current price levels.

Daily Swing Chart Technical Forecast

Based on yesterday’s close at 24616 and the early price action, the direction of the December E-mini Dow Jones Industrial Average on Thursday is likely to be determined by trader reaction to yesterday’s low at 24511.

Bullish Scenario

Holding above 24511 will indicate that aggressive counter-trend buyers are coming in to support the market. If this creates enough upside momentum then look for buyers to challenge the Fibonacci level at 24824. Overcoming this level will indicate the buying is getting stronger with the next targets the 50% level at 25233 and the minor top at 25338. The latter is the trigger point for a potential acceleration to the upside with the next targets 25845 to 25930.

Bearish Scenario

Taking out 24511 with conviction will signal the presence of sellers. This could trigger an acceleration to the downside with 24000 the next target. After a technical bounce, taking out this level could drive the Dow into 23580 to 23500.

Closing Price Reversal Bottom Scenario

Taking out 24511 then regaining 24616 will put the Dow in a position to form a potentially bullish closing price reversal bottom. This could lead to the start of a 2 to 3 day counter-trend rally.