September E-mini Dow Jones Industrial Average futures are trading flat shortly after the cash market opening. Volume is light as investors await the release of Apple’s earnings report after the close of the cash market. Apple is a component of the Dow so the futures contract is likely to see volatility upon release of the report.
Daily Technical Analysis
The main trend is up according to the daily swing chart, however, momentum shifted to down with the formation of the closing price reversal top on Friday and the subsequent confirmation of this chart pattern on Monday.
A trade through 25572 will negate the reversal top and signal a resumption of the uptrend. The main trend will change to down on a trade through 24912.
The main range is 24912 to 25572. Its retracement zone at 25242 to 25164 is the primary downside target. Since the main trend is up, buyers are likely to show up on a test of this zone.
Daily Technical Forecast
Based on the early trade, the first two upside targets are a pair of uptrending Gann angles at 25360 and 25386.
A failure to overcome the angles at 25360 and 25386 will indicate that sellers are defending this area. If they decide to press the Dow lower then look for a move into the 50% level at 25242. We could see a technical bounce on the first test of this level, but if it fails then look for further weakness with 25164 the next target. Once again, buyers could come in on a test of this Fib level.
If 25164 fails then look for a test of the uptrending Gann angle at 25136.
Overtaking 25386 will signal the return of buyers. If this creates enough upside momentum then look for the rally to continue into the downtrending Gann angle at 25444. Overtaking this angle could lead to a test of additional Gann angles at 25508 and 25540. The latter is the last potential resistance angle before the 25572 main top.
Essentially, it all comes down to how investors react on a test of 25242 to 25164. If enough buyers come in on a test of this zone then a secondary higher bottom could form. This could be a potentially bullish development.
If the retracement zone fails as support then sellers may try to change the trend by taking out 24912.