E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Chopping Inside Retracement Zone

September E-mini Dow Jones Industrial Average futures are trading lower at the mid-session as it tries to claw back earlier losses that saw the blue chip average hit a two-week low. Earlier in the session it plunged into an area that could’ve triggered an even steeper decline, but buyers came in to defend against that move.

At 16:05 GMT, September E-mini Dow Jones Industrial Average futures are at 26122, down 318 or -1.20%.

Some of the early selling pressure was fueled by data that confirmed the economy suffered its steepest contraction since the Great Depression in the second quarter. Adding to the gloom was an initial claims report that showed another rise in the latest week and a resurgence in coronavirus cases throughout the United States.

After the close, Dow component Apple Inc reports quarterly earnings.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 27057 will change the main trend to up.

The minor range is 27057 to 25881. Its retracement zone at 26469 to 26608 is a potential upside target and resistance zone. If tested, sellers are likely to show up in an effort to form a secondary lower top.

The main retracement zone is 26298 to 25938. This zone is controlling the longer-term direction of the Dow. The market is currently trading inside this zone.

Daily Swing Chart Technical Forecast

Based on the early price action and the current price at 26122, the direction of the September E-mini Dow Jones Industrial Average into the close is likely to be determined by trader reaction to the 50% level at 25938 and the Fibonacci level at 26298.

Bearish Scenario

A sustained move under 25938 will indicate the presence of sellers. Taking out the low at 25881 and the minor bottom at 25874 will indicate the selling pressure is getting stronger. This could trigger an acceleration to the downside with the next targets a main bottom at 25293 and another major 50% level at 25053.

Bullish Scenario

A sustained move over 26298 will signal the presence of buyers. This could lead to a labored rally with potential targets coming in at 26469 and 26608. Taking out the latter could trigger an acceleration to the upside.

For a look at all of today’s economic events, check out our economic calendar.