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E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Supported by Lower Rate Hike Outlook

By:
James Hyerczyk
Published: Jun 27, 2022, 10:57 UTC

In the cash market, the Dow Jones Industrial Average is on track to mark its worst first half of the year in more than 50 years.

E-mini Dow Jones Industrial Average

In this article:

September E-mini Dow Jones Industrial Average futures are edging higher shortly before the cash market opening on Monday, while attempting to build on last week’s gains. Despite the current technical bounce and short-covering rally, the blue chip average is still poised to finish the worst half for stocks in decades.

At 10:23 GMT, September E-mini Dow Jones Industrial Average futures are trading 31580, up 93 or +0.30%. On Friday, the SPDR Dow Jones Industrial Average ETF (DIA) finished at $315.12, up $8.38 or +2.73%.

The average surged on Friday as investors reduced their expectations on Federal Reserve rate hikes amid indications of a slowdown in economic growth. U.S. rate futures priced in a 73% probability of a 75 basis-point increase at the July meeting. For September the market has factored in a 50-bps rise.

In the cash market, the Dow Jones Industrial Average is on track to mark its worst first half of the year in more than 50 years as the Fed tightens monetary policy in its fight against the highest inflation in four decades.

Although bottom-picking and short-covering helped the market finish the week higher for the first time since May, investor expectations bouncing between continued high inflation and a recession caused by a hawkish Fed, indicate that volatility is likely to remain the theme for months.

Daily September E-mini Dow Jones Industrial Average

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. However, momentum is trending higher. A trade through 33255 will change the main trend to up. A move through 29639 will signal a resumption of the downtrend.

The minor trend is up. This is controlling the momentum. It changed to up last week when buyers took out the minor top at 30999.

The short-term range is 33255 to 29639. The E-mini Dow is currently testing its retracement zone at 31447 to 31874. Trader reaction to this area will determine the near-term direction of the E-mini Dow.

The main range is 35405 to 29639. Its retracement zone at 32599 to 33261 is the next major upside target.

The minor range is 29639 to 31695. Its trailing pivot at 30667 is the nearest support.

Daily Swing Chart Technical Forecast

Trader reaction to the short-term 50% level at 31447 is likely to determine the direction of the September E-mini Dow Jones futures contract into the close on Monday.

Bullish Scenario

A sustained move over 31447 will indicate the presence of buyers. This could trigger a surge into the short-term Fibonacci level at 31874.

Since the main trend is down, sellers could come in on the first test of 31874. Overtaking it, however, could trigger an acceleration into the main retracement zone at 32599 to 33261.

Bearish Scenario

A sustained move under 31447 will signal the presence of sellers. If this creates enough downside momentum then look for the selling to extend into the trailing pivot at 30667.

For a look at all of today’s economic events, check out our economic calendar.

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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