E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Taking out 23103 Shifts Momentum to Down

June E-mini Dow Jones Industrial Average futures closed lower on Wednesday as gloomy economic data and anemic bank earnings fueled concerns over the coronavirus’s impact on the U.S. economy.

Traders cited a plunge in March retail sales as a principal weight on equities on Wednesday. The worse-than-expected data showed retail sales during the month of March plunged a record 8.7%, the largest one-month decline since the department began tracking the series in 1992.

On Wednesday, June E-mini Dow Jones Industrial Average futures settled at 23391, down 489 or -2.09%.

Manufacturing in the New York area also slumped by its biggest margin ever to a historic low, surpassing the levels seen in the throes of the Great Recession.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum may be getting ready to shift to the downside with the formation of a potentially bearish closing price reversal top on Wednesday. This was the second closing price reversal top in three days. This strongly suggests the selling may be greater than the buying at current price levels.

A trade through 23103 will confirm the closing price reversal top. This will also shift momentum to the downside. A trade through 23967 will negate the closing price reversal top and signal a resumption of the uptrend.

The minor trend is also up. A trade through 22968 will change the minor trend to down. This will reaffirm 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 22524 to 23571 is currently being tested.

The short-term range is 18086 to 23967. Its retracement zone at 21027 to 20333 is another potential support area.

Daily Swing Chart Technical Forecast

Based on Wednesday’s price action and the close at 23391, the direction of the June E-mini Dow Jones Industrial Average futures contract on Thursday is likely to be determined by trader reaction to 23103.

Bearish Scenario

A sustained move under 23103 will indicate the presence of sellers. This will confirm the closing price reversal top. A trade through 22968 will change the minor trend is down. This could lead to a test of the 50% level at 22524.

Taking out 22524 could trigger an acceleration to the downside with the next target a short-term retracement zone at 21027 to 20333.

Bullish Scenario

A sustained move over 23103 will signal the presence of buyers. This could trigger a rally into a pair of retracement levels at 23571 and 23796, followed by the closing price reversal top at 23967.

Taking out 23967 will indicate the buying is getting stronger. If this is able to trigger enough upside momentum, we could see an acceleration into the major Fibonacci level at 25144.