September E-mini Dow Jones Industrial Average futures are inching lower on Tuesday shortly after the cash market opening. The trading range is tight for a second session as volatility is being sucked out of the market. Despite the start of earnings season, many of the major players may have taken to the sidelines ahead of the European Central Bank meeting on July 25 and the U.S. Federal Reserve on July 31.
At 13:31 GMT, September E-mini Dow Jones Industrial Average futures are trading 27333, down 10 or -0.04%.
Shortly before the cash market opening, the Dow was being underpinned by better-than-expected earnings reports from components Goldman Sachs and Johnson & Johnson. J.P. Morgan Chase also reported on Tuesday better-than-expected second-quarter earnings and revenue.
Daily Technical Analysis
The main trend is up according to the daily swing chart. A trade through 27397 will signal a resumption of the uptrend. The main trend will change to down on a move through 26657. This is highly unlikely, but the market is ripe for a closing price reversal top.
Daily Technical Forecast
Based on the early price action and the current price at 27333, the direction of the September E-mini Dow Jones Industrial Average on Tuesday is likely to be determined by trader reaction to a pair of uptrending Gann angles at 27305 and 27297.
Bullish Scenario
A sustained move over 27305 will indicate the presence of buyers. If this creates enough upside momentum then look for buyers to make a run at yesterday’s high at 27397. Taking out this level will signal a resumption of the uptrend.
Bearish Scenario
A sustained move under 27297 will signal the presence of sellers. If this generates enough downside pressure then look for a break into the next uptrending Gann angle at 27213.
Since the main trend is up, look for a technical bounce on the first test of 27213. If this angle fails as support, we could see an acceleration to the downside with the next target angle coming in at 26977
Overview
Volume and volatility are light so there may not be enough power to breakout to the upside. Taking out 27397 then turning lower for the session will indicate the buying is getting weak and the selling is getting stronger.
