E-mini Dow Jones Industrial Average (YM) Futures Analysis – July 21, 2017 Forecast

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

The Dow is also trading inside last week’s range, which may be a function of the below average volume, sector rotation, the lack of exposure to the bullish tech sector, or the mixed reaction to components Goldman Sachs and IBM.

Perhaps investors aren’t happy that the European Central Bank is considering tapering stimulus and raising rates sooner than expected. The point is, something is stopping the market from rallying and slowing down the upside momentum.

Technical Analysis

The main trend is up according to the daily swing chart. A trade through 21628 will signal a resumption of the uptrend. However, the buying must be strong enough to sustain the rally, or a potentially bearish closing price reversal top may form.

The short-term range is 21628 to 21416. Its 50% level or pivot is 21522. Holding above this level will mean buyers are coming in to sustain the rally.

The intermediate range is 21226 to 21628. Its retracement zone at 21427 to 21380 is the next downside target. A failure at 21522 will likely trigger an acceleration into this zone.

The main retracement zone is 21287 to 21234. If sellers can take out the minor bottom at 21416 and the intermediate Fib at 21380 then we could see a test of this retracement zone.

Forecast

Based on the current price at 21556 and this week’s price action, the direction of the Dow today is likely to be determined by trader reaction to the pivot at 21522.

Holding above 21522 will mean buyers are coming in to defend the uptrend. Taking it out will mean that sellers are increasing pressure. This could trigger an acceleration to the downside.

The volume has been below average this week and today is Friday so it may even be lower today so be careful buying strength and selling weakness.