E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Reaction to 27531 – 27141 Sets Tone

September E-mini Dow Jones Industrial Average futures tumbled more than 2% at the open on Tuesday as investors sold off shares of Tesla and other major technology issues, while simmering U.S.-China tensions and concerns over a sputtering economic rebound also weighed on sentiment.

Despite the steep sell-off in the broad-based indexes, the Dow is performing a little better because of its reduced exposure in the tech sector. Nonetheless, components Apple and Microsoft are down 4.22% and 3.99% respectively.

At 13:42 GMT, September E-mini Dow Jones Industrial Average futures are trading 27587, down 709 or -2.50%.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The downtrend resumed on Tuesday when sellers took out last week’s low at 27643. The main trend changes to up on a trade through 29180.

The short-term range is 25881 to 29180. Its retracement zone at 27531 to 27141 is currently being tested.

The minor range is 27392 to 29180. Its 50% level or pivot at 28286 is resistance.

Daily Swing Chart Technical Forecast

Based on the early price action, the direction of the September E-mini Dow Jones Industrial Average the rest of the session on Tuesday is likely to be determined by trader reaction to the short-term 50% level at 27531.

Bearish Scenario

A sustained move under 27531 will indicate the presence of sellers. This could lead to a quick test of the minor bottom at 27392, followed by the short-term Fibonacci level at 27141.

We could see a technical bounce on the first test of this level, but if 27141 fails as support then look for an acceleration to the downside with the next major target area 25910 to 25881.

Bullish Scenario

Regaining and holding above 27531 will signal the return of buyers. This may create the upside momentum needed for a retest of the minor pivot at 28286.

Side Notes

The key area to watch is 27531 to 27141. Bullish traders may come in on a test of this zone in order to prevent a steep break. Some may see this area as representing value.