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James Hyerczyk
E-mini Dow Jones Industrial Average

September E-mini Dow Jones Industrial Average futures are trading sharply lower late in the session on Friday. The selling pressure started early on rising concerns over increasing COVID-19 cases in the United States and their possible impact on the re-opening of the economy. The selling pressure accelerated, however, on worries that the U.S. intervention in Chinese interests could risk the Phase 1 trade deal.

At 19:07 GMT, September E-mini Dow Jones Industrial Average futures are trading 24915, down 661 or 2.60%. This is up slightly from a low of 24857.

After the early weakness, the Dow extended its losses after The Wall Street Journal said U.S. ‘meddling’ in Hong Kong, Taiwan, and other matters could jeopardize Chinese goods purchases under the trade deal.

Daily September 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 June 9.

A trade through 27466 will signal a resumption of the uptrend. The main trend will change to down on a more through 22640.

The minor trend is down. Taking out the nearest main bottom at 24409 could trigger an acceleration to the downside. A move through the minor top at 26294 will change the minor trend to up and shift momentum to the upside.

The minor range is 27466 to 24409. Its 50% level or pivot at 25938 is resistance. It’s also controlling the near-term direction of the Dow.

The main retracement zone at 25107 to 23760 is controlling the longer-term direction of the market. It is also major support.

The short-term range is 22640 to 27466. Its retracement zone at 25053 to 24484 is another potential downside target. This zone falls inside the major zone. This zone is currently being tested. Since the main trend is up, buyers could come in on a test of this area.


Short-Term Outlook

Into the close and early Monday, we’re going to be watching trader reaction to the major Fibonacci level at 25107. This should set the tone of the market next week.

Don’t be surprised by a volatile, two-sided traded when the market enters the area formed by the Fib level at 25107 and the minor bottom at 24409. Buyers are not going to give up on the long side very easily.

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

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