E-mini Dow Jones Industrial Average (YM) Futures Analysis – October 27, 2014 Forecast

December E-mini Dow Jones Industrial Average futures closed over a steep uptrending angle, a major Fibonacci level and in a position to challenge a pair of main tops this week at 16949 and 17020.

For eight days, the Dow has been traveling up an angle from the 15769 bottom, moving at a pace of 128 points per week. This angle is at 16793 today. Friday’s close at 16736 means the Dow will open under this angle on Monday, putting it in a weak position to start the week. Overcoming this angle later in the session will be a sign of strength.

If the tone turns bullish then look for buyers to make a run at a downtrending angle at 16863. This angle is followed by a pair of tops at 16949 and 17020. A trade through these levels will turn the main trend to up on the daily chart.

On the downside, the first sign of weakness will be a failure to overcome 16793. Breaking under the Fibonacci level at 16702 could trigger the start of a sharp break into a 50% level at 16524.

Today is the eighth day up from the 15769 bottom which puts the Dow in a position to form a potentially bearish closing price reversal top. Traders need to watch the intraday action to determine early in the session if this type of reversal is forming.

The tone of the market today will likely be determined by trader reaction to the Fibonacci level at 16702.