E-mini Dow Jones Industrial Average (YM) Futures Analysis – January 10, 2017 Forecast

March E-mini Dow Jones Industrial Average futures are called lower shortly before the cash market opening. The market is trying to claw back from an early session break into 19785.

Although the Dow took out yesterday’s low, it is still trading inside Friday’s range. This tells me that someone is trying to prop up the market or defend Friday’s low at 19760. There may be sell stops hidden under this price.

Technical Analysis

The main trend is up according to the daily swing chart. A trade through 19933 will signal a resumption of the uptrend. The main trend will turn down on a trade through 19661.

The main range is 19933 to 19661. Its 50% level or pivot is 19797. This price was tested successfully earlier today. It appears to be controlling the near-term direction of the market.

The main range is 19001 to 19933. If there is a massive sell-off then its 50% level at 19467 will become the primary downside target.

Forecast

There doesn’t seem to be a lot of buying activity today and even last week’s moves didn’t seem to indicate an urgency to get long. At the same time, short sellers seem to be probing the downside for weakness or as floor traders used to say, “Looking for the puke point”. The price action suggests we should get ready for a possible quick spike to the downside.

Based on the current price at 19816 and the earlier price action, the direction of the Dow today is likely to be determined by trader reaction to 19797.

A sustained move over 19797 will indicate the presence of buyers, but look for a labored rally because of potential resistance at 19829, 19853 and 19881. The latter is the last potential resistance level before the 19925 and 19933 main tops.

A sustained move under 19797 will signal the presence of sellers. The next target is the long-term uptrending angle at 19769. This is followed by Friday’s low at 19760. I think the latter is the trigger point for the start of a steep break.

If shorting weakness through 19760 make sure you have volume on your side and the low is taken out with conviction. Investors have been buying dips so if this market is preparing to accelerate to the downside then buyers are going to have to pull their bids.