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E-mini Dow Jones Industrial Average (YM) Futures Analysis – Straddling RT Zone; Bullish Over 24341, Bearish Under 23790

By:
James Hyerczyk
Published: Jun 30, 2018, 20:40 UTC

Based on last week’s price action and the close at 24265, the direction of the September E-mini Dow Jones Industrial Average futures contract this week is likely to be determined by trader reaction to the 50% level at 24341.

E-mini Dow Jones Industrial Average

Blue chip stocks closed lower last week for the third straight week. Concerns over a trade war between the U.S. and its key trading partners, China and the European Union, weighed on prices.

September E-mini Dow Jones Industrial Average futures settled at 24265, down 334 or -1.36%. At the end of the second quarter, the Dow was down 514.00 or -2.07%.

E-mini Dow Jones Industrial Average
Weekly September E-mini Dow Jones Industrial Average

Weekly Swing Chart Technical Analysis

The main trend is actually up according to the weekly swing. In late January/early February, the Dow broke sharply over a two-week period, but never took out a swing bottom because of the strength and duration of the previous rally leading up to the top.

Since the bottom at 23178, we’ve seen a lot of noise and several minor swings, leading to a mostly sideways to higher trade. A move through this bottom will indicate the selling pressure is getting stronger, but at this time, the trend won’t change to down according to the swing chart unless the September 15, 2017 bottom at 22009 is taken out.

The minor trend is down, however. After trending higher for several weeks, the minor trend changed to down last week on the trade through 24263. This also shifted momentum to the downside.

The main range is 22009 to 26672. Its 50% to 61.8% retracement zone at 24341 to 23790 respectively is controlling the longer-term direction of the Dow. Closing below the 50% level on Friday gives the market a slight downside bias at the start of the new week.

Weekly Swing Chart Technical Forecast

Based on last week’s price action and the close at 24265, the direction of the September E-mini Dow Jones Industrial Average futures contract this week is likely to be determined by trader reaction to the 50% level at 24341.

A sustained move under 24341 will indicate the presence of sellers. If this move generates enough downside momentum then look for the selling to extend into the Fibonacci level at 23790.

Taking out 23790 could lead to a test of a pair of uptrending Gann angles at 23353 and 22681. The latter is the last major uptrending support angle before the 22009 main bottom.

Overcoming and sustaining a move over 24341 will signal the presence of buyers. This could lead to a rally into an uptrending Gann angle at 24697. Overcoming this angle will indicate the buying is getting stronger. This could then fuel a rally into the downtrending Gann angle at 25200. This is the angle that stopped the rally last week at 25418.

Overcoming the angle at 25418 could trigger an acceleration to the upside.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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