June E-mini Dow Jones Industrial Average futures are trading sharply higher late Thursday, putting the market in a position to post its first weekly gain in eight weeks. The catalysts behind the move are a raft of solid retail earnings and soft economic data. Dow retail stocks posting the biggest gains are Home Depot, up 3.07% and Walmart, up 2.02%.
In economic news, first-quarter gross domestic product declined at a 1.5% annual pace, worse than the 1.3% Dow Jones estimate and a writedown from the initially reported 1.4%, the Commerce Department reported Thursday.
Initial claims for the week ending May 14 totaled 218,000, which was an increase from the previous period and slightly higher than the 215,000 estimate.
The mixed economic data released on Thursday was actually good news for the stock market. The data on quarterly GDP and weekly jobless claims is suggesting the economy is slowing just enough to prompt a possibly dovish pivot from the Fed by September.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. The trend turned up when buyers took out the last swing top at 32692. A trade through 30585 will change the main trend to down.
The short-term range is 34027 to 30585. The market is currently testing its retracement zone at 32306 to 32712.
The intermediate range is 35413 to 30585. Its 50% level at 32999 is another upside target.
The main resistance is the retracement zone at 33647 to 34369.
On the downside, the next potential support is the minor retracement zone at 31656 to 31403.
Daily Swing Chart Technical Forecast
Trader reaction to 32712 will likely determine the direction of the June E-mini Dow into the close on Thursday and on the opening early Friday.
A sustained move over 32712 will indicate the presence of buyers. If this creates enough momentum then look for a late session surge into 32999. This is the last potential resistance before the 33647 to 34369 retracement zone.
A sustained move under 32712 will signal the presence of sellers. This could generate the downside momentum needed to challenge the short-term 50% level at 32306.