E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Trader Reaction to 27801 Sets the Tone

September E-mini Dow Jones Industrial Average futures are expected to open higher based on the pre-market trade. Last week, the Dow closed 1.8% higher for its third straight weekly gain. Despite the early gain, investors seem a little tentative ahead of earnings reports from the major retailers later this week, the start of the Democratic National Convention and the release of the latest Fed minutes.

At 13:07 GMT, September E-mini Dow Jones Industrial Average futures are trading 27897, up 105 or +0.38%.

Later this week, Dow components Home Depot and Walmart are scheduled to release their latest earnings reports.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, but the closing price reversal top on August 11 has stopped the rally.

A trade through 28069 will negate the closing price reversal top and signal a resumption of the uptrend. Meanwhile, a move through 27532 will confirm the potentially bearish chart pattern. This won’t change the main trend to down, but it will shift momentum to the downside. This could trigger a 2 to 3 day correction.

The minor range is 25881 to 28069. If the closing price reversal top is confirmed then its retracement zone at 26975 to 26717 will become the primary downside target.

Daily Swing Chart Technical Forecast

The last wide one-day price range is 28069 to 27532 from August 11. Since that date, the market has traded inside this range. Trader reaction to its 50% level at 27801 is likely to set the tone on Monday.

Bullish Scenario

A sustained move over 27801 will indicate the presence of buyers. If this creates enough upside momentum then look for a possible rally into 28069. This is a potential trigger point for an acceleration to the upside. The daily chart indicates there is plenty of room to run with 29467 the next major target.

Bearish Scenario

A sustained move under 27801 will signal the presence of sellers. The first target is 27532. Taking out this level will confirm the closing price reversal top, shifting momentum to the downside. If this move is able to create enough downside momentum then look for the selling to possible extend into 26975 to 26717 over the near-term.