E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Trader Reaction to 34951 Sets Early Tone

September E-mini Dow Jones Industrial Average futures closed at a record high on Friday while the cash market close above 35,000 for the first time ever, bringing its gain for 2021 to more than 14%. The blue chip average also posted a fourth straight day of gains. Analysts also noted that it made the 1,000-point trek rather quickly, having closed above 34,000 for the first time ever back in mid-April.

That’s important to note because some investors and media people get freaked out by actual points lost or gained during volatile trading sessions. Daily percentage movement is much more important. Let’s say the Dow moves about 1% a session. As it moves higher, that percentage is going to translate into 350, 360, 370 point days. It’s the same 1% though.

On Friday, September E-mini Dow Jones Industrial Average futures settled at 34951, up 242 or +0.69%.

This week, the focus shifts to tech stock earnings and the Federal Reserve. Traders aren’t expecting much from the Fed, which is why the market has been rallying. Investors seem to have accepted the notion that inflation is temporary. The risk is still to the downside since the Fed could surprise again by announcing a tapering date or moving the date of the first rate hike closer. But those are wildcards.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through Friday’s high at 34993 will reaffirm the uptrend. A move through 33623 will change the main trend to down.

The nearest support is a minor retracement zone at 34308 to 34146. This zone will move up as the market moves higher.

The second level of support is the retracement zone at 33948 to 33701.

The third support area is 33418 to 33046.

Daily Swing Chart Technical Forecast

The direction of the September E-mini Dow Jones futures contract early Monday will be determined by trader reaction to 34951.

Bullish Scenario

A sustained move over 34951 will indicate the presence of buyers. Taking out 34993 will indicate the buying is getting stronger. This is a potential trigger point for an acceleration to the upside since there isn’t any resistance.

Bearish Scenario

A sustained move under 34951 will signal the presence of sellers. If this move is able to generate enough downside momentum then look for a pullback into the first minor retracement zone at 34308 to 34146. Remember that this zone will move higher if buyers take out 34993 so make the adjustment. Since the main trend is up, buyers are likely to come in on a test of this area.