E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Momentum May Have Shifted to Downside

September E-mini Dow Jones Industrial Average futures finished lower on Monday while posting a potentially bearish closing price reversal top in the process. Early in the session, Dow components were mixed with Apple Inc trading about 0.8% higher, and Microsoft and Walmart between 2.0% and 2.5% lower. Despite the lower close, the Dow wrapped up its best August in more than 30 years.

On Monday, September E-mini Dow Jones Industrial Average futures settled at 28416, down 195 or -0.69%.

The price-weighted Dow kicked off the week with three new constituents and with Apple having a much smaller influence on the 30-stock average after its stock split. As of Monday’s opening, Salesforce, Amgen and Honeywell were added to the Dow, replacing outgoing components Exxon Mobil, Pfizer and Raytheon Technologies.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was reaffirmed early in the session when buyers took out Friday’s high, but the closing price reversal top suggests that momentum may be getting ready to shift to the downside.

The main trend will change to down on a move through the nearest main bottom at 25881. This is highly unlikely, but there is room for a short-term correction.

The minor trend is also up. A trade through 27392 will change the minor trend to down. This will also shift momentum to the downside.

The minor range is 27392 to 28783. Its 50% level at 28088 is the first downside target.

The main range is 25881 to 28783. If the minor trend changes to down then its retracement zone at 27332 to 26990 will become the next downside target.

Short-Term Outlook

Trader reaction to 28333 could set the tone on Tuesday. A trade through this level will confirm the closing price reversal top. This could trigger the start of a 2 to 3 day correction, but at a minimum, it should lead to a test of the first minor pivot at 28088.

The daily chart indicates that 28088 is a potential trigger point for an acceleration to the downside. This could trigger a further break into 27392 to 27332.

On the upside, taking out 28783 will negate the closing price reversal top and signal a resumption of the uptrend.

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