E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – May 20, 2019 Forecast

The blue chip Dow Jones Industrial Average is expected to open lower on Monday based on the early futures trade. The selling pressure is being generated by escalating tensions between the United States and China, which threaten to wipe out positive expectations from months of serious trade negotiations between the two economic powerhouses.

Although the current dispute centers on telecom Huawei, and other technology companies, the Dow is also being dragged down because it faces exposure too from bellwether companies like John Deere and Caterpillar.

At 13:22 GMT, June E-mini Dow Jones Industrial Average futures are trading 25626, down 154 or -0.59%.

Daily Technical Analysis

The main trend is down according to the daily swing chart. A trade through 25215 will signal a resumption of the downtrend. A move through 26694 will change the main trend to up. This will be difficult due to several layers of resistance.

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

The main range is 26694 to 25215. Its retracement zone at 25955 to 26129 is resistance. The lower or 50% level stopped the buying last Thursday and Friday.

The short-term range is 25215 to 25955. Its retracement zone at 25585 to 25498 is currently acting like support.

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 short-term 50% level at 25585.

Bullish Scenario

A sustained move over 25585 will indicate the presence of buyers. If this move can generate enough upside momentum then look for the rally to possibly extend into the 50% level at 25955.

Taking out 25955 will indicate the buying is getting stronger. This could trigger a rally into the minor top at 26016. This is followed by a resistance cluster at 26118 to 26129. This is resistance and the trigger point for an acceleration to the upside.

Bearish Scenario

Taking out 25585 will signal that the selling is getting stronger. This could lead to a quick test of the downtrending Gann angle at 25542, followed closely by the short-term Fibonacci level at 25498.

Look for an acceleration to the downside if 25498 fails as support. This could trigger a break into the minor bottom at 25215. If the selling is strong enough to take out this bottom then look for the move to possibly extend into the February 8 bottom at 24900.

Overview

It looks as if a secondary lower top is forming. This is a particularly bearish development. A failure to hold the retracement zone at 25585 to 25498 will confirm the secondary lower top. This could bring in some heavy sellers.