E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Formation of Secondary Lower Top at 26394 Will Be Bearish Sign

Based on the late session price action, the direction of the September Dow Jones Industrial Average into the close is likely to be determined by trader reaction to the main 50% level at 26012.
James Hyerczyk
Dow Jones Industrial Average

September E-mini Dow Jones Industrial Average futures are trading lower shortly before the futures market close. After early session strength, the index turned south and never looked back after Hong Kong closed its airport to departure following a tenth day of intensifying protests. This opened the door to renewed concerns over U.S.-China trade relations.

At 20:24 GMT, September E-mini Dow Jones Industrial Average futures are at 25864, down 404 or -1.54%.

The news drove the benchmark 10-year Treasury yield to 1.63%, slightly above last week’s lowest level since 2016. The spread between the 2-year and 10-year Treasury yields narrowed to only 6 basis points on Monday, near its lowest level since 2007.

The 2-year, 10-year yield spread is being watched because an inversion will be a strong indication of a recession in about 18 months and this would be bearish for stocks.

Daily September E-mini Dow Jones Industrial Average

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 the closing price reversal bottom at 25032 on August 6. Today’s price action indicates that a secondary higher bottom may be forming.

A trade through 27358 will change the main trend to up. A follow-through to the downside on Tuesday will lower the swing top and change in trend level at 26394.

A move through 25032 will signal a resumption of the downtrend. This could trigger a further break into the next main bottom target at 24626.

The main range is 24626 to 27397. Its retracement zone at 26012 to 25685 is controlling the near-term direction of the market.

The short-term range is 27397 to 25032. Its retracement zone at 26215 to 26494 is resistance. It stopped the rally at 26394 on Friday.

The minor range is 25032 to 26394. Its retracement zone at 25713 to 25552 is the next target zone. It actually surrounds the main Fibonacci level at 25685.

Daily Swing Chart Technical Forecast

Based on the late session price action, the direction of the September Dow Jones Industrial Average into the close is likely to be determined by trader reaction to the main 50% level at 26012.

Bearish Scenario

A sustained move under 26012 will indicate the selling is getting stronger. This could lead to a test of a series of retracement levels at 25713, 25785 and 25552. We could see a bounce on the first test of this area.

The minor Fibonacci level at 25552 is a potential trigger point for an acceleration into the main bottom at 25032.

Bullish Scenario

A sustained move over 26012 will indicate the return of buyers. The next upside target is the retracement zone at 26215 to 26494. Inside this zone is the minor top at 26394.

Don't miss a thing!

Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All
IMPORTANT DISCLAIMERS
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
RISK DISCLAIMER
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.
FOLLOW US