E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Trade Thru 35258 Confirms Reversal Top
September E-mini Dow Jones Industrial Average futures posted a potentially bearish closing price reversal top on Tuesday. If confirmed, we could see the start of a 2 to 3 day correction.
We could also see a change in trend on the move, but most of the time the pattern is only signaling that the selling is greater than the buying at current price levels.
In this case, the higher-high, lower-close chart pattern may have formed because of end-of-the-month portfolio adjustments or position-squaring ahead of Friday’s U.S. August Non-Farm Payrolls report.
On Tuesday, September E-mini Dow Jones Industrial Average futures settled at 35340, down 12 or -0.03%.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart, but the closing price reversal top chart pattern suggests momentum may be getting ready to shift to the downside.
A trade through 35492 will negate the closing price reversal top and signal a resumption of the uptrend. A move through 35258 will confirm the closing price reversal top and could trigger the start of a short-term correction. The main trend will change to down on a move through 35114.
The minor range is 35114 to 35492. Its 50% level or pivot comes in at 35303.
The short-term range is 34494 to 35492. If the main trend changes to down then its retracement zone at 34993 to 34875 will become the primary downside target zone.
Daily Swing Chart Technical Forecast
The direction of the September E-mini Dow on Wednesday is likely to be determined by trader reaction to 35375.
A sustained move over 35375 will indicate the presence of buyers. If this move creates enough upside momentum then look for the rally to possibly extend into 35492. Taking out 35492 will negate the closing price reversal top and could trigger a surge into the record high at 35547.
A sustained move under 35375 will signal the presence of sellers. The first target is the pivot at 35303. Taking out this level could trigger a sharp break into the main bottom at 35114.
If 35114 fails as support, the main trend will change to down with the next target coming in at 34993 to 34875.