E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Momentum Shifting to Downside

June E-mini Dow Jones Industrial Average futures are trading lower at the mid-session after reversing earlier gains. The market was trading higher during the pre-market session on optimism around a Gilead drug to treat the coronavirus as well as on comments from Chairman Powell that the Federal Reserve will use its powers to the “absolute limit” following the coronavirus-induced downturn.

Stocks began to give up gains during the European session after the European Central Bank (ECB) failed to deliver the financial aid that investors had been expecting. U.S. equities dropped even further after the latest data showed more than 30 million Americans filed for unemployment over the last six weeks. Meanwhile, the U.S. economy shrank 4.8% in the first quarter, marking the biggest decline since the worst of the financial crisis.

At 15:48 GMT, June E-mini Dow Jones Industrial Average futures are trading 24210, down 467 or -2.15%.

Daily June E-mini Dow Jones Industrial Average

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum is getting ready to shift to the downside with the formation of a potentially bearish intraday closing price reversal top.

A trade through 24792 will signal a resumption of the uptrend. The main trend will change to down on a trade through the last main bottom at 22914.

The main range is 29506 to 18086. Its retracement zone at 23796 to 25144 is controlling the longer-term direction of the Dow. The market is currently trading inside this zone.

The intermediate range is 26962 to 18086. Its retracement zone at 23571 to 22524 is additional support.

The key area to watch is a support cluster at 23796 to 23571.

Daily Swing Chart Technical Forecast

Based on the early price action and the current price at 24210, the direction of the June E-mini Dow Jones Industrial Average into the close is likely to be determined by trader reaction to yesterday’s close at 24566.

Bearish Scenario

A sustained move under 24566 will indicate the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into the support cluster at 23796 to 23571. The latter is a potential trigger point for an acceleration to the downside.

Bullish Scenario

A sustained move over 24566 will signal the return of buyers. Taking out the intraday high at 24792 will indicate the buying is getting stronger. This could lead to a test of the main Fibonacci level at 25144.

Side Notes

June E-mini Dow Jones Industrial Average futures are up 7 days from the last main bottom which puts it inside the window of time for a closing price reversal top. A close under 24566 will create this chart pattern. If confirmed, it won’t change the main trend to down, but it could trigger the start of a 2 to 3 day counter-trend sell-off.

Published by

James Hyerczyk

James A. Hyerczyk has worked as a fundamental and technical financial market analyst since 1982. His technical work features the pattern, price and time analysis techniques of W.D. Gann.