E-mini Dow Jones Industrial Average (YM) Futures Analysis – May 29, 2017 Forecast

The June Dow Jones industrial Average futures contract closed higher last week and within striking distance of its all-time high at 21106. The blue chip Dow is chasing the benchmark S&P 500 Index and technology-based NASDAQ Composite, which posted new highs and record closes last week.

The cash market is closed on Monday so volume and volatility are expected to be light due to limited electronic trading. If trading today, try to avoid getting caught in volume and volatility traps.

Volume may actually be unusually low this week due to U.S. inflation data on Tuesday and most importantly, Friday’s U.S. Non-Farm Payrolls report for May. This outcome of this report is likely to determine the Fed’s interest rate decision on June 14.

We’re going to look at the weekly chart today. This should be used in combination with the daily chart all week.

Technical Analysis

The main trend is up according to the daily swing chart. A trade through 21106 will signal a resumption of the uptrend. The main trend will turn down on a trade through 20311.

A trade through 20474 will change the minor trend to down.

The short-term range is 19558 to 21106. Its retracement zone at 20332 to 20149 is the primary downside target. Traders should treat this zone as support. It stopped the selling during the week-ending April 21 when the Dow futures contract bottomed at 20311.

Forecast

Based on last week’s close at 21066, the direction of the Dow futures contract this week is likely to be determined by trader reaction to the main top at 21106.

A sustained move over 21106 will indicate the presence of buyers. Overtaking the long-term uptrending angle at 21203 will indicate the buying is getting stronger. This could trigger an acceleration to the upside.

A sustained move under 21106 will signal the presence of sellers. The next potential support angle comes in at 21079.

Look for an acceleration to the downside if 20179 fails as support. If the selling is strong enough, we could see a correction into a pair of uptrending angles at 20695 and 20503. The latter is the last potential support angle before the 50% level at 20332, the main bottom at 20311 and the Fibonacci level at 20149.