E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – August 21, 2019 Forecast

September E-mini Dow Jones Industrial Average futures are trading higher shortly after the cash market opening. The rally is being fueled by strong quarterly performances from retailers Target and Lowe’s. Investors are also expecting today’s Fed minutes to show the central bank’s willingness to cut rates more aggressively in the future in order to perk up the economy and prevent a U.S. or global recession.

At 13:53 GMT, September E-mini Dow Jones Industrial Average futures are trading 26198, up 270 or +1.03%.

The markets have already fully-priced a quarter-point rate cut next month, and over 100 basis points of easing by the end of next year.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. However, momentum has been trending higher since the formation of a pair of closing price reversal bottoms at 25526 and 25032.

A trade through 26237 will change the main trend to up. If this occurs then 25872 will become the new secondary higher bottom. Currently, the nearest main bottom is 25226.

The short-term retracement zone resistance is 26215 to 26494.

The main retracement zone support is 26012 to 25685.

The market has been chopping between these levels for two weeks, indicating investor indecision and impending volatility.

Daily Swing Chart Technical Forecast

Based on the early price action and the current price at 26198, the direction of the September E-mini Dow Jones Industrial Average on Wednesday is likely to be determined by trader reaction to the main 50% level at 26012.

Bullish Scenario

A sustained move over 26012 will indicate the presence of buyer. This could lead to a test of the short-term 50% level at 26215. Taking out this level will put the Dow in a position to test the main top at 26237.

A move through 26237 will change the main trend to up. This could trigger a surge into the main top at 26408 and the short-term Fibonacci level at 26494. This is the trigger point for an acceleration to the upside.

Bearish Scenario

The inability to take out 26215 to 26237 will signal the presence of sellers. This could lead to a retest of the main 50% level at 26012. If this level fails then look for a break into the intraday low at 25872. Taking out this level could trigger a break into the main Fibonacci level at 25685. This is the trigger point for an acceleration to the downside.