E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Uptrend Resumes over 26559 with 27397 Next Major Target

September E-mini Dow Jones Industrial Average futures finished slightly better on Friday during a lackluster, pre-holiday trade. The market was underpinned by the hope that next Thursday’s resumption of trade talks between the United States and China would yield some fruit and bring the two economic powerhouses closer to a potential long-term deal that would end the prolonged trade dispute. Low volume helped cap gains with many of the major players on the sidelines ahead of Monday’s U.S. Labor Day holiday. The major U.S. stock exchanges are close on September 2.

On Friday, September E-mini Dow Jones Industrial Average futures settled at 26406, up 28 or +0.11%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The trend turned up on August 29 when buyers took out the main top at 26375. It was reaffirmed on August 30 when buyers drove through the main top at 26408. The main trend will change to down on a trade through the last main bottom at 25266.

The minor trend is also up. A trade through 25620 will change the minor trend to down. This will shift momentum to the downside and serve as a warning that the main bottom could be challenged.

The short-term range is 27397 to 25032. Its retracement zone at 26215 to 26494 is currently being tested. Trader reaction to this zone will tell us if the buying is getting stronger, or if the market is setting up for a near-term correction.

The main range is 24626 to 27397. Its retracement zone at 26012 to 25685 is major support. This zone is controlling the longer-term direction of the Dow.

Daily Swing Chart Technical Forecast

Based on Friday’s price action and the close at 26406, the direction of the September E-mini Dow Jones Industrial Average futures contract on Tuesday is likely to be determined by trader reaction to the short-term Fibonacci level at 26494.

Bullish Scenario

A sustained move over 26494 will indicate the presence of buyers. Taking out Friday’s high at 26559 will indicate the buying is getting stronger. This could trigger an acceleration to the upside with the next major target the July 15 main top at 27397.

Bearish Scenario

A sustained move under 26494 will signal the presence of sellers. If Friday’s low fails then look for the selling to possibly extend into the short-term 50% level at 26215. Since the main trend is up, buyers could come in on the first test of this level. If it fails then look for the selling to possibly extend into the main 50% level at 26012. Once again, look for buyers since this is major support.

Taking out 26012 will be a sign of weakness. This could trigger an acceleration into the main Fibonacci level at 25685. This level has to hold or prices will weaken further.