E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Needs Close Over 25816 to Produce Closing Price Reversal Bottom

Based on the current price at 25822, the direction of the June E-mini Dow Jones Industrial Average into the close is likely to be determined by trader reaction to Thursday’s close at 25816.  
James Hyerczyk
E-mini Dow Jones Industrial Average

A strong intraday recovery by the June E-mini Dow Jones Industrial Average futures contract has put the market in a position to post a potentially bullish closing price reversal bottom on Friday. The catalyst is the hope that there is still time to strike a trade agreement with China, even with the U.S. imposing new tariffs on Chinese imports just after midnight.

The blue chip average mounted a strong rebound rally and briefly turned higher for the session after Treasury Secretary Steven Mnuchin said China trade talks were “constructive.” Chinese Vice Premier Liu He also said the talks went “fairly well,” according to reports.

Additionally, Bloomberg News is reporting the U.S. told China it had three to four weeks to come to an agreement or the White House would enact more tariffs.

At 18:36 GMT, June E-mini Dow Jones Industrial Average futures are trading 25822, up 6 or 0.03%.

Daily June E-mini Dow Jones Industrial Average

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 25464 will signal a resumption of the downtrend with the next target bottoms 25377 and 25246.

The main trend will change to up on a trade through 26694. This is highly unlikely today given current volatility levels. However, the index is down 12 sessions from its last main top on April 24. This puts the index inside the window of time for a potentially bullish closing price reversal bottom.

The main range is 24900 to 26694. Its retracement zone at 25797 to 25585 remains the primary downside target. Although it didn’t provide exact support early in the session because of the strong downside momentum, it is acting like support late in the session.

Today’s intraday low came in between the main Fib level at 25585 and the next main bottom at 25377.

The intermediate range is 25246 to 26694. Its retracement zone at 26036 to 25880 is acting like resistance late in the session.

The short-term range is 26694 to 25464. If the market turns higher today then look for a test of its retracement zone at 26079 to 26224.

Combining the intermediate and short-term retracement zones makes a pair of 50% levels at 26036 and 26079 very important resistance.

Daily Swing Chart Technical Forecast

Based on the current price at 25822, the direction of the June E-mini Dow Jones Industrial Average into the close is likely to be determined by trader reaction to Thursday’s close at 25816.

Bullish Scenario

A sustained move over 25816 will indicate the presence of buyers. This will put the Dow in a position to post a potentially bullish closing price reversal bottom on the daily chart. If confirmed, this could lead to a 2 to 3 counter-trend rally.

Overtaking the intermediate Fibonacci level at 25880 will indicate the buying is getting stronger. This could trigger a surge into a pair of 50% levels at 26036 to 26079. Look for sellers on the first test of this area, but prepare for an acceleration into possibly 26224 if 26079 is taken out with strong volume.

Bearish Scenario

A sustained move under 25816 will signal the presence of sellers. Crossing to the weak side of the main 50% level at 25797 will indicate the selling is getting stronger. This could trigger an acceleration to the downside with 25585 the next target.

Look for the selling to extend if 25585 fails with potential targets coming in at 25464, 25377 and 25246.

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