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James Hyerczyk

June E-mini Dow Jones Industrial Average futures tumbled on Friday, ending a massive three-day surge after doubts about the fate of the U.S. economy resurfaced and the number of coronavirus cases in the country climbed.

The blue chip average deepened their losses late in the session, even after the House of Representatives approved a $2.2 trillion aid package – the largest in American history – to help people and companies cope with an economic downturn caused by the coronavirus outbreak and provide hospitals with urgently needed medical supplies.

On Friday, June E-mini Dow Jones Industrial Average futures settled at 21437, down 911 or -4.25%.

Daily June E-mini Dow Jones Industrial Average

Daily Technical Analysis

The main trend is down according to the daily swing chart. A trade through 26962 will change the main trend to up. A move through 18086 will signal a resumption of the downtrend.

The minor trend is up. This shifted momentum to the upside, however, Friday’s closing price reversal top may be a sign that momentum is getting ready to shift back to the downside.

The short-term range is 26962 to 18086. Its retracement zone at 22524 to 23571 is resistance. This zone stopped the rally at 22545 on Friday, leading to the closing price reversal top.

The minor range is 18086 to 22545. If the closing price reversal is confirmed next week then look for a pullback into its retracement zone at 20316 to 19789.

A pair of downtrending Gann angles also influenced the price action. On Friday, the market briefly traded to the strong side of a pair of Gann angles at 22182 and 22354. By the end of the session, however, the market finished on the weak side of this angles and another downtrending Gann angle at 21570.

The downtrending Gann angles at 21570 and 22354 are likely to continue to influence the direction of the June E-mini Dow Jones Industrial Average next week.

On the downside, the targets are a steep uptrending Gann angle at 20134 and a retracement zone at 20316 to 19789.


Short-Term Outlook

Trader reaction to 20316 to 19789 should set the tone next week. Aggressive counter-trend buyers could come in on a test of this zone. They are going to try to form a potentially bullish secondary higher bottom. This could eventually lead to a change in trend.

If 19789 fails as support then 22545 will become a new lower top and sellers will likely go after the current main bottom at 18086.

Keep an eye on 20316 to 19789 next week.

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