E-mini Dow Jones Industrial Average (YM) Futures Analysis – October 16, 2014 Forecast

December E-mini Dow Jones industrial Average futures took out the 50% to 61.8% retracement zone for the year, but settled back inside the zone after successfully testing a major long-term uptrending angle from the low for the year at 15085.

Today, the uptrending angle that provided support yesterday moves up to 15797. If this angle fails then look for the selling pressure to continue with a possible downside target another uptrending angle at 15441. This is the last angle before the February 3 main bottom at 15085.

Since the Dow closed at 16007, the first support is the major Fibonacci level at 15923. Holding this level could produce enough upside momentum to challenge a steep downtrending angle at 16063.

A breakout above the downtrending angle at 16063 could trigger further short-covering into the major 50% level at 16182. This is a key level to watch because the daily chart indicates there is plenty of room to the upside over this level with a downtrending angle at 16671 a potential upside target.

The tone of the market should be determined by investor reaction to 16182 on the upside and 15923 on the downside. Watch the order flow and price action if these level are tested. Since the market has sold off for a prolonged period of time, be careful selling weakness. Make sure any breakouts occur on with better-than-average volume or you can be whip-sawed.