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E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Strong Over 23796, Weak Under 23571

By:
James Hyerczyk
Published: May 7, 2020, 04:29 UTC

Based on Wednesday’s price action and the close at 23513, the direction of the June E-mini Dow Jones Industrial Average futures contract on Thursday is likely to be determined by trader reaction to the 50% level at 23796 and the Fibonacci level at 23571.

E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Strong Over 23796, Weak Under 23571

June E-mini Dow Jones Industrial Average futures fell on Wednesday after U.S. President Donald Trump cast doubt on a trade deal with China and data showed U.S. private employers laid off 20 million workers in April, underscoring the economic fallout of the coronavirus outbreak. The blue-chip index also came under pressure from declines in oil giant Chevron Corp. as crude oil prices fell.

On Wednesday, June E-mini Dow Jones Industrial Average futures settled at 23513, down 248 or -1.05%.

The Dow has rebounded sharply with a rally in April sparked by unprecedented stimulus and signs that the virus outbreak was peaking. However, with macroeconomic data still foreshadowing a severe global recession, analysts have warned of another selloff, particularly if reopening of economies sparks another wave of infections.

Daily June E-mini Dow Jones Industrial Average

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, momentum has been trending lower since the formation of the closing price reversal top on April 30.

A trade through 24792 will negate the closing price reversal top and signal a resumption of the uptrend. The main trend will change to down on a trade through the last swing bottom at 22914.

The minor trend is also up. A trade through 23208 will change the minor trend to down. This will confirm the shift in momentum to down.

The main range is 29506 to 18086. Its retracement zone at 23796 to 25144 is resistance. This zone is also controlling the longer-term direction of the Dow.

The intermediate range is 26962 to 18086. Its retracement zone at 23571 to 22524 is support.

The combination of the two retracement zones makes 23796 to 23571 a major price cluster.

Daily Swing Chart Technical Forecast

Based on Wednesday’s price action and the close at 23513, the direction of the June E-mini Dow Jones Industrial Average futures contract on Thursday is likely to be determined by trader reaction to the 50% level at 23796 and the Fibonacci level at 23571.

Bearish Scenario

A sustained move under 23571 will indicate the presence of sellers. The first downside target is the minor bottom at 23208. This is a potential trigger point for an acceleration into the main bottom at 22914 and the 50% level at 22524.

Bullish Scenario

A sustained move over 23796 will signal the presence of buyers. Taking out the minor top at 24057 could trigger a surge to the upside with the next targets the main top at 24792 and the major Fibonacci level at 25144.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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