E-mini Dow Jones Industrial Average (YM) Futures Analysis – May 25, 2017 Forecast

June E-mini Dow Jones industrial Average futures are called higher shortly before the cash market opening. Investors have been reacting positively to the Fed Meeting Minutes which outlined a few of the details of its plan to shrink its balance sheet.

Prior to the release of the minutes, investors were concerned that the central bank would reduce its assets too aggressively, but the minutes suggest the Fed will have a more orderly process.

Concerns were also raised that the Fed may not raise rates until the economy gets stronger. This uncertainty may also be boosting stocks, but the Fed Funds indicator suggests otherwise. This means that investors will have to pay closer attention to the economic reports on labor and inflation until the Fed makes its decision in mid-June.

Technical Analysis

The main trend is up according to the daily swing chart. The trend changed when buyers took out the top at 20995 and the two tops at 21010. This puts the Dow on course to challenge its all-time high at 21106.

The Dow is up 5 days since the last main bottom, but the market has gone vertical. This means we should start watching for signs of sellers. The best signal would be a higher-high, lower close.

The first signs of weakness today will be a break under the main tops at 21010 and 20995. Falling back below these levels will indicate that buy stops rather than new buying is triggering the current price surge.

Forecast

Continue to look for an upside bias with 21106 the next target as long as the Dow remains over the main tops at 21010 and 20995. Start preparing for a near-term correction of the Dow breaks below these levels and turns lower for the session.