E-mini Dow Jones Industrial Average (YM) Futures Analysis – October 8, 2014 Forecast

The sharp sell-off by the December E-mini Dow Jones Industrial Average has put the market in a position to challenge the main bottom at 16589. This will reaffirm the main downtrend. Don’t expect a wash-out to the downside, however, since a major Fibonacci level comes in at 16577.

Taking out 16577 with conviction could trigger an acceleration to the downside since the daily chart indicates the next two downside targets are long-term uptrending angles at 16479 and 16311.

Based on yesterday’s close at 16651, a pair of minor angles come in at 16653 and 16621. These angles could slow down an early break into 16589.

On the upside, the key area to watch is the 50% level at 16711 and the uptrending angle at 16717. Overcoming 16717 could trigger a rally into the short-term pivot at 16805.

Overtaking 16805 with conviction could lead to a rally into a loose resistance cluster at 16845 to 16863. Taking out 16863 will likely lead to a test of the retracement zone at 16934 to 17016.

Because of the numerous angles, any rally today is likely to be labored. The only true acceleration point is 16577. Breaking this level could trigger a 100 point break into 16479.

Watch the price action and order flow if 16577 is tested. Trader reaction to this price should set the tone for the day.