E-mini Dow Jones Industrial Average (YM) Futures Analysis – Poised to Make New Low for Year

After consolidating early in the week for three sessions, June E-mini Dow Jones Industrial Average futures plunged sharply lower, reaching levels not seen since February 9. The selling was fueled by a combination of rising interest rates and fears of a trade war after President Trump announced sanctions against China.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. We actually started to see signs of increasing selling pressure on March 12 when the Dow diverged from the June E-mini S&P 500 Index and the June E-mini NASDAQ-100 Index, forming a potentially closing price reversal top at that time.

The downtrend was reaffirmed last week when sellers took out the March 2 bottom at 24233. It now has enough downside momentum to challenge the February 6 main bottom at 23122.

This type of sell-off often ends with a dramatic closing price reversal bottom. The Dow is currently in the window of time for a closing price reversal bottom so we’ll be watching for that. It’s not going to mean the trend is getting ready to turn up, but it will indicate the buying is greater than the selling at current price levels, and this may be enough to fuel a 2 to 3 day counter-trend rally.

After the January to February sell-off, the Dow consolidated inside a pair of retracement zones. This indicated investor indecision, and like all lengthy consolidations, impending volatility.

The resistance turned out to be the 50% level at 24923 and the Fibonacci level at 25347.

The Dow accelerated to the downside when the support zone at 24477 to 24157 failed as support. These levels are now resistance.

Daily Swing Chart Technical Forecast

Momentum will be the story early this week. If the pressure resumes then sellers should easily take out last week’s low at 23496. If this creates enough downside momentum then look for a challenge of the February 6 bottom at 23122.

Recapturing the Fib level at 24157 will signal that the buying is greater than the selling at current price levels.