E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Trade Thru 32722 Confirms Reversal Top

June E-mini Dow Jones Industrial Average futures are edging higher early Friday as investors try to claw back some of the losses from the previous session. The blue chip index posted a potentially bearish closing price reversal top on Thursday with technology stocks being particularly hard hit.

The weakness in the equity market was mirrored by a spike in bond yields, with the benchmark 10-year Treasury yield breaking above 1.7%, its highest level since January of last year. Early Friday, June 10-year Treasury futures were moving higher, suggesting yields may be stabilizing. This has the potential to be supportive for stocks.

At 07:12 GMT, June E-mini Dow Jones Industrial Average futures are trading 32826, up 61 or +0.19%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, yesterday’s closing price reversal top may be an early indication that momentum is getting ready to shift to the downside.

A trade through 33116 will negate the closing price reversal top and signal a resumption of the uptrend. A move through 32722 will confirm the closing price reversal top. This could trigger the start of a 2 to 3 day correction.

The first minor range is 31613 to 33116. Its 50% level at 32365 is the first downside target.

The second minor range is 30429 to 33116. Its 50% level at 3177 is the second downside target.

Daily Swing Chart Technical Forecast

The direction of the June E-mini Dow Jones Industrial Average futures contract on Friday is likely to be determined by trader reaction to 32722.

Bullish Scenario

A sustained move over 32722 will indicate the presence of buyers. The first upside target is a 50% level at 32919. Watch for sellers on the first test of this level. Overcoming it, however, could trigger a further rally into 31116.

Bearish Scenario

A sustained move under 32722 will signal the presence of sellers. This will confirm the closing price reversal top. If it creates enough downside momentum then look for a possible acceleration to the downside with 32365 the first likely target.

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