September E-mini Dow Jones Industrial Average futures closed higher on Friday, diverging from the cash market Dow, which closed lower for the session. The blue chip average started higher, boosted by a surge in Apple after the tech giant reported stunning quarterly earnings the night before. However, the Dow couldn’t hold on to those gains shortly after the opening as concerns about the economic damage from the COVID-19 pandemic encouraged investors to book profits.
On Friday, September E-mini Dow Jones Industrial Average futures settled at 26378, up 160 or +0.61%.
Investors betting on more U.S. government stimulus were also disappointed as the Senate adjourned for the weekend after letting the extra $600-per-week federal jobless benefit expire.
Other Dow components were also a drag on the blue chip average. Chevron Corp reported an $8.3 billion loss on asset write-downs and ExxonMobil Corp recorded a second consecutive quarterly loss. Caterpillar reversed premarket gains and fell 3.2% after the heavy equipment maker signaled more pain from an uncertain economic outlook.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. A trade through 25881 will signal a resumption of the downtrend. The main trend will change to up on a move through the last main top at 27057 and 27063.
The minor trend is also down. A trade through 26599 will change the minor trend to up. This will also shift momentum to the upside.
The minor range is 27057 to 25881. Its retracement zone at 26469 to 26608 is resistance. This zone is controlling the near-term direction of the Dow.
The main range is 27466 to 24409. Its retracement zone at 25938 to 26298 is major support and a possible trigger point for an acceleration to the downside.
Last week’s price action said it all. Simply stated, in order to get the September E-mini Dow Jones Industrial Average rolling to the upside again, the 50% level at 25938 has to hold as support, and the buying has to be strong enough to overcome the minor Fibonacci level at 26608.
Since the main trend is down, sellers are likely to defend 26469 to 26608. If buyers can overtake 26608, however, we could see an acceleration to the upside with the next targets 27057 to 27063.
If sellers can stop the rally then traders are going to try to work on the downside. This could mean a test of 25938 to 25881. There’s even another minor bottom at 25874. This price is a potential trigger point for an acceleration to the downside with 25293 and 25053 the next potential downside targets.