E-mini Dow Jones Industrial Average (YM) Futures Analysis – October 16, 2018 Forecast

December E-mini Dow Jones Industrial Average futures are surging shortly after the opening on Tuesday in reaction to strong earnings reports from several major companies. Before the opening, the market was trading higher on the back of strong moves by UnitedHealth and Goldman Sachs. Johnson & Johnson also posted better-than-expected earnings.

At 1400 GMT, the E-mini Dow is trading 25462, up 261 or 1.04%.

Daily Technical Analysis

The main trend is down according to the daily swing chart. However, three days of consolidation inside Thursday’s wide range suggests a transition may be taking place. Furthermore, the pattern tends to indicate impending volatility. A trade through 24893 will signal a resumption of the downtrend.

We’re not looking for a change in trend today, but the daily chart indicates there is room to the upside.

The key support is the major retracement zone at 25233 to 24824. Last week’s low at 24893 was reached inside this zone. After that the Dow straddled the 50% level at 25233 for three days as investors continued to build a support base.

The short-term range is 26966 to 24893. If there is enough upside momentum over the near-term then its retracement zone at 25930 to 26174 will become the primary upside target.

Daily Technical Forecast

Based on the early trade, the direction of the December E-mini Dow Jones Industrial Average futures contract the rest of the session is likely to be determined by trader reaction to the 50% level at 25233.

A sustained move over 25233 will indicate the presence of counter-trend buyers. The first objective for these buyers will be the downtrending Gann angle at 25814. This is followed closely by the short-term 50% level at 25930.

A failure to hold 25233 could draw the attention of the sellers. If this generates enough downside momentum then look for potential weakness into 24893 and 24824.