E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Trade Through 35402 First Sign of Momentum Shift

September E-mini Dow Jones Industrial Average futures are edging higher at the mid-session on Friday after giving back some of its earlier gains. The index opened strong after shares of Disney jumped more than 2% after it reported blowout fiscal third-quarter earnings. The move helped push the cash and futures contract to fresh intraday records.

At 16:46 GMT, September E-mini Dow Jones Industrial Average futures are trading 35440, up 38 or +0.11%.

Prices began to retreat as investors began to take profits after the University of Michigan’s sentiment read for August printed at just 70.2, the weakest since December 2011.

The university’s report said, “Consumers have correctly reasoned that the economy’s performance will be diminished over the next several months, but the extraordinary surge in negative economic assessments also reflects an emotional response, mainly from dashed hopes that the pandemic would soon end.”

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through the intraday high at 35519 will signal a resumption of the uptrend.

A move through 33623 will change the main trend to down. This is highly unlikely but due to the prolonged rally in terms of price and time, the Dow may be ripe for a potentially bearish closing price reversal top.

The new minor range is 34602 to 35519. Its 50% level at 35061 is the nearest support level.

The short-term range is 33623 to 35519. If the minor trend changes to down then its retracement zone at 34571 to 34347 will become the primary downside target.

Daily Swing Chart Technical Forecast

The direction of the September E-mini Dow into the close on Friday is likely to be determined by trader reaction to 35402.

Bullish Scenario

A sustained move over 35402 will indicate the presence of buyers. If this move creates into upside momentum then look for buyers to make a run at 35519 into the close. Taking out this level could trigger an acceleration to the upside if the volume is strong enough.

Bearish Scenario

A sustained move under 35402 will signal the presence of sellers. Taking out the intraday low at 35392 will indicate the selling pressure is getting stronger with potential downside targets coming in at 35255, 35106 and the pivot at 35061.

Side Notes

A close under 35402 will form a closing price reversal top on the daily chart. If confirmed next week, this could trigger the start of a 2 to 3 day correction.