E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Low Volume Suggests Weak Buying

September E-mini Dow Jones Industrial Average futures soared to an all-time high on Friday and ended the record-setting week with its highest close in history. Fueling the rally was testimony from U.S. Federal Reserve Chairman Jerome Powell that signaled a rate cut for later in the month. Powell told a committee of congressional leaders on July 10 that “crosscurrents” from weaker overseas economic activity and rising trade tensions are dampening the outlook on the U.S. economy.

On Friday, September E-mini Dow Jones Industrial Average futures settled at 27309, up 232 or +0.85%.

At the end of the week, investor expectations for a 25-basis point rate cut stood at 100%, according to the CME Group’s FedWatch tool. Investors are also pricing in a 20% chance of a 50-basis point rate cut.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 27330 will signal a resumption of the uptrend. The main trend will change to down on a move through 26657.

The short-term range is 26657 to 27330. If the range stays the same then the nearest potential support is the 50% level or pivot at 26994.

The intermediate range is 25897 to 27330. If the trend changes to down then its retracement zone at 26614 to 26444 will become the next downside target.

Daily Swing Chart Technical Forecast

The direction of September E-mini Dow Jones Industrial Average on Monday is likely to be determined by trader reaction to Friday’s high at 27330.

Bullish Scenario

A sustained move over 27330 will indicate the presence of buyers. There is no resistance.

Bearish Scenario

A sustained move under 27330 will signal the presence of sellers. If this move creates enough downside momentum then look for the selling to extend into the short-term pivot at 26994.

Look for a technical bounce on the first test of 26994, but if it fails then watch for an acceleration to the downside with 26657 and 26614 the next potential downside targets.

Closing Price Reversal Top

A third scenario could also develop. Taking out 27330 then turning lower for the session will put the Dow in a position to form a potentially bearish closing price reversal top. If confirmed, this could lead to a 2 to 3 day counter-trend break.

Overview

According to CNBC, “Volume was light on Wall Street Friday, with around 30 million shares of the SPDR S&P 500 ETF changing hands, the lowest amount of the year.”