E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Needs to Hold 26145 to Sustain Rally

June E-mini Dow Jones Industrial Average futures are holding steady at the mid-session after hitting its highest level since March 4 earlier in the session. The rally was driven early by upbeat manufacturing data from China over the week-end. This news dampened concerns over a global recession, helping to drive up U.S. Treasury yields and appetite for risk. Optimism over U.S.-China trade relations also provided some support.

At 15:40 GMT, June E-mini Dow Jones Industrial Average futures are trading 26169, up 236 or +0.91%. The high of the session is 26200.

Today’s slew of U.S. economic reports failed to garner much of a reaction by investors as most are focused by the outcome of Friday’s U.S. Non-Farm Payrolls report.

U.S. manufacturing activity expanded last month, rebounding from its lowest level since late 2016, according to data from the Institute for Supply Management. The Dow hit its high of the day immediately after the release of this report then the rally stalled.

Earlier in the session, U.S. Core Retail Sales fell 0.4% versus a 0.4% estimate. The previous month was revised higher by 1.4%. Retail Sales were 0.2% lower versus a 0.3% forecast. The previous month was revised upward to 0.7%.

An increase in Business Inventories was offset by a 1% jump in Construction Spending.

Daily Technical Analysis

The main trend is up according to the daily swing chart. The trend turned up earlier in the session when buyers took out 26145. The market is not in a position to change the main trend to down, but a break back under 26145 will be a sign that the selling is greater than the buying at current price levels. Closing lower for the session will produce a potentially bearish closing price reversal top. This could lead to a 2 to 3 day counter-trend break.

Daily Technical Forecast

Based on the current price at 26169 and the earlier price action, the direction of the June E-mini Dow Jones Industrial Average futures contract the rest of the session is likely to be determined by trader reaction to the previous top at 26145.

Bullish Scenario

A sustained move over 26145 will indicate the buying is real and getting stronger. The next target is the March 4 top at 26200. This price is the trigger point for an acceleration into the February 25 main top at 26263. This is the last main top before the 26988 contract high.

Bearish Scenario

A sustained move under 26145 will signal the presence of sellers. The next target is the steep uptrending Gann angle at 26017. This is followed closely by Friday’s close at 25933. Turning lower for the session will put the Dow in a bearish position. This could trigger the start of a steep break with the next target angles coming in at 25758 and 25697.