E-mini Dow Jones Industrial Average (YM) Futures Analysis – July 4, 2017 Forecast

The Weekly September E-mini Dow Jones Industrial Average futures contract is in an uptrend, but the market isn’t as strong as it was from mid-April to late-June. At that time, it was moving up at a pace of about 128 point per week. The main trend is still up, but the momentum has slowed a little.

On Monday, the futures contract took out the previous top at 21494. This made 21138 a new minor bottom. Taking out this bottom will change the minor trend to down. This could trigger the start of a meaningful 50% to 61.8% correction.

There is no upside target per se, but the best sign of a top will be a dramatic higher-high, lower-close, or closing price reversal top.

On the downside, this week, the nearest support angle comes in at 21202. If this fails then look for investors to go after the minor bottom at 21138.

If enough stops are hit then look for the selling to extend into the major uptrending angle at 21202. This angle is also very important to the structure of the rally so I expect buyers to show up on a test of this angle. We could see a further acceleration to the downside if this angle fails as support.

Basically, the tone of the market the rest of the week will be determined by trader reaction to last week’s close at 21300 and the previous main top at 21494.

Crossing back below 21494 will indicate that Monday’s attempted breakout was fueled by sell stops rather than new buying. If the selling is strong enough to take out last week’s close at 21300 then this will put the Dow in a position to form a potentially bearish closing price reversal top.

Essentially, the Dow has to continue to make higher-highs and higher-lows on the daily chart and pull away from 21494 to suggest the buying is getting stronger. If it fails to do this, then this will suggest the selling is greater than the buying at current price levels.