E-mini Dow Jones Industrial Average (YM) Futures Analysis – No Resistance, but Watch for Closing Price Reversal Top

The Dow posted an all-time closing high on Friday while the other major indexes settled lower for the session. The rally was driven by strong upside momentum. Since we’re trading at an all-time high, there is no resistance. Therefore, a chart pattern, not a resistance level is likely to stop this rally. Due to the prolonged move up in terms of price and time, the chart pattern we’ll be looking for is a closing price reversal top.

On Friday, September E-mini Dow Jones Industrial Average futures settled at 26754, up 27 or +0.10%.

Traders said the reason for the rally last week was the easing of trade tensions between the United States and China. If this was the case then we could see a weaker start to trading on Monday because late Friday, China cancelled its meetings with the United States. The meetings may have been rescheduled for after the November elections.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 26820 will signal a resumption of the uptrend. The main trend will change to down on a trade through 25991.

If the short-term range is 25991 to 26820 then its 50% level at 26406 will become the first downside target.

The potential main range is 25784 to 26820. Its retracement zone at 26302 to 26180 is the next downside target.

Daily Swing Chart Technical Forecast

Due to the prolonged move up in terms of price and time, the direction of the December E-mini Dow Jones Industrial Average is likely to be determined by trader reaction to Friday’s low at 26712.

Taking out 26712 will break the pattern and signal the presence of sellers. This will also make 26820 a new minor top. If this move creates enough downside momentum, we could see a drive into the short-term 50% level at 26406.

The failure to take out 26712 or sustain a move under this level will indicate the presence of buyers. This could lead to a retest of 26820 or possibly a breakout through this level.

Traders should also watch for a higher-high, lower-close chart pattern. This will signal that the selling is greater than the buying at current price levels.