E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Trader Reaction to 26509 Will Set Tone on Monday

Based on Friday’s price action and the close at 26394, the direction of the June E-mini Dow Jones Industrial Average futures contract is likely to be determined by trader reaction to Friday’s high at 26509.
James Hyerczyk
E-mini Dow Jones Industrial Average

June E-mini Dow Jones Industrial Average futures finished slightly better on Friday after giving up most of its earlier gains. The price action suggests investors had some trouble with the U.S. Non-Farm Payrolls report. Although the headline number beat the forecast and unemployment remained at a low level, investors raised concerns over the slow growth of wages.

On Friday, June E-mini Dow Jones Industrial Average futures settled at 26394, up 6 or +0.02%.

According to the U.S. Bureau of Labor Statistics, the economy added 196,000 jobs in March, better than the 175,000 jobs estimate. The U.S. unemployment rate, meanwhile, remained at 3.8%. However, wage growth expanded 3.2%, below an expected gain of 3.4%.

Daily June E-mini Dow Jones Industrial Average

Daily Swing Chart Technical Analysis

The main trend is up. It turned up on April 1 when buyers took out three main tops at 26145, 26200 and 26263. This levels are new support. A break below them won’t indicate a change in trend, but it will indicate the buying is weakening, or the selling is getting stronger.

A trade through 26509 will signal a resumption of the uptrend. The main trend will change to down on a trade through 25377.

The main trend is safe at this time, but Monday will mark the 10th day up from the last swing bottom, putting the Dow inside the window of time for a closing price reversal top. If formed and confirmed, this could lead to the start of a 2 to 3 day correction.

The short-term range is 25377 to 26509. Its retracement zone at 25943 to 25809 is a potential downside target.

Daily Swing Chart Technical Forecast

Based on Friday’s price action and the close at 26394, the direction of the June E-mini Dow Jones Industrial Average futures contract is likely to be determined by trader reaction to Friday’s high at 26509.

Bullish Scenario

A sustained move over 26509 will indicate the presence of buyers. If this move generates enough upside momentum then look for the rally to possibly extend into the October 3, 2018 main top at 26988 over the near-term.

Bearish Scenario

A sustained move under 26509 will signal the presence of sellers. If this move leads to a series of lower-highs, and lower-lows then look for the selling pressure to possibly extend into the 50% level at 25943.

Closing Price Reversal Top Set-Up

Given the prolonged move up in terms of price and time, Monday’s session begins with the Dow in the window of time for a potentially bearish closing price reversal top. Taking out 26509 then closing below 26394 will form this chart pattern.

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