E-mini Dow Jones Industrial Average (YM) Futures Analysis – October 10, 2013 Forecast

On Wednesday, the December E-mini Dow Jones industrial Average futures contract posted a potentially bullish closing price reversal bottom on the daily chart. This chart pattern was confirmed overnight, giving the market an upward bias from the get-go.

In addition to the chart pattern, the market also crossed over to the bullish side of a downtrending Gann angle at 15178. Since this angle provided resistance and direction for 15 days, the breakout could be indicating a significant change in sentiment. If momentum is strong enough, the market may reach 15036 over the next two days.

 

Fundamentally, investors are optimistic that a meeting between Republican leaders and President Obama will lead to an end to the 10 day government shutdown. In addition, investors are betting the government will come up with a plan to extend the government debt ceiling so that it doesn’t default on its debt on October 17.

This morning’s weekly jobless claims missed by a long shot. Investors were looking for 307K. The actual was reported at 374K. Investors are taking the report in stride since it appears a computer glitch was behind the jump.

Treasury Secretary Lew was scheduled to speak early this morning. Later in the session, the government will release the results of its latest 30-Year Bond auction. Fed member Tarullo is also scheduled to speak later in the session.

Continue to look for increased volatility as this is still a news driven market. At the start, look for bullish sentiment to drive the market higher, but be prepared for a sudden change if the talks between Obama and the Republicans break down before they reach an agreement to end the government shutdown or extend the debt limit.