E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Counter-Trend Buyers Trying to Defend Three Main Bottoms

June E-mini Dow Jones Industrial Average futures are trading lower after the first hour of trading on Monday. Sellers are pressing the market after China retaliated against new tariffs from the U.S. by placing tariffs of 25% on $60 billion of U.S. imports. They are expected to kick-in on June 1.

Most of today’s weakness occurred prior to the release of the news which suggests investors may have already been trying to price in the tariffs. In other words, the news did not come as a surprise.

The early price action also suggests investors may be showing respect for a series of bottoms at 25377, 25246 and 24900. The latter is the trigger point for an acceleration to the downside. Traders should note that these levels are not value. The value area is 24122 to 23515.

At 14:29 GMT, June E-mini Dow Jones Industrial Average futures are trading 25390, down 574 or -2.25%.

Daily Technical Analysis

The main trend is down according to the daily swing chart. The downtrend was reaffirmed earlier today when sellers took out Friday’s low at 25464. If the selling pressure continues then look for bearish traders to make a run at the three main bottoms at 25377, 25246 and 24900. Aggressive sellers will be hunting for sell stops.

The market is in no position to change the main trend to up, but we could see a closing price reversal bottom like Friday if the selling dries up, or if aggressive counter-trend buyers become motivated by bullish headlines.

The minor trend is down. A trade through 26016 will change the minor trend to up. This will also shift momentum to the upside.

The main range is 21550 to 26694. If the three bottoms fail then look for an acceleration into its retracement zone at 24122 to 23515. Since this is a value zone, buyers could come in on a test of this area.

Daily Technical Forecast

Based on the early price action, the direction of the June E-mini Dow Jones Industrial Average the rest of the session is likely to be determined by trader reaction to the 25377 main bottom.

Bullish Scenario

Holding above 25377 will indicate the presence of buyers. They are defending this bottom and the others at 25246 and 24900. If this move creates enough upside momentum then look for the buying to possibly extend into the downtrending Gann angle at 25862.

The angle at 25862, is moving down at a rate of 64 points per day from the 26694 main top. This angle has been guiding the market lower for 13 consecutive trading sessions. Overtaking it will indicate the buying is getting stronger. This could turn the Dow higher and lead to a breakout over 26016.

Bearish Scenario

A sustained move under 25377 will indicate the selling is getting stronger. This could create the downside momentum needed to take out the bottoms at 25246 and 24900. Taking out the latter could lead to a test of the uptrending Gann angle at 24550.

The Gann angle at 24550 is the potential trigger point for an acceleration into the major 50% level at 24122.