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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 8, 2020, 18:05 UTC

Based on Friday’s price action, the direction of the June E-mini Dow Jones industrial Average into the closed is likely to be determined by trader reaction to the main 50% level at 23796 and the intermediate 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 are trading sharply higher on Friday even after the U.S. reported the worst monthly jobs report in history. However, investors looked beyond this news and instead continued to bet the worst of the coronavirus and its impact on the economy has passed.

Earlier today, the Labor Department said a record 20.5 million jobs were lost last month, adding the unemployment rate jumped to 14.7% from just 4.4%. Economists polled by Dow Jones expected a loss of 21.5 million jobs and an unemployment rate of 16%.

At 18:32 GMT, June E-mini Dow Jones Industrial Average futures are trading 24107, up 232.00 or +1.06%.

Despite the strength, the Dow remains well below its December 31, 2019 close. This is because investors are buying sectors and not the whole market. Technology is one popular sector, while energy and airlines are not.

Daily June E-mini Dow Jones Industrial Average

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 24792 will signal a resumption of the uptrend, while a move through 23208 will change the main trend to down.

The minor trend is up. This means momentum is also up.

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

The intermediate range is 26962 to 18086. Its retracement zone at 23571 to 22524 is support. This zone stopped selling recently at 23208, 22914 and 23079.

Daily Swing Chart Technical Forecast

Based on Friday’s price action, the direction of the June E-mini Dow Jones industrial Average into the closed is likely to be determined by trader reaction to the main 50% level at 23796 and the intermediate Fibonacci level at 23571.

Bullish Scenario

A sustained move over 23796 will indicate the presence of buyers. If this move creates enough upside momentum over the near-term then look for a test of the main top at 24792 and the main Fibonacci level at 25144.

Bearish Scenario

A sustained move under 23571 will signal the presence of sellers. This could trigger a break into the main bottom at 23208. Taking out this level will change the main trend to down with potential targets coming in at 22914 and 22524.

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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