E-mini Dow Jones Industrial Average

E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – ‘Possibility’ of Recession Capping Gains

September E-mini Dow Jones Industrial Average futures are edging lower early Thursday after the blue chip average slipped into negative territory shortly before yesterday’s regular session close. Driving the selling pressure is worries over the likelihood of a recession after Federal Reserve Chair Jerome Powell acknowledged it’s a possibility.

At 03:24 GMT, September E-mini Dow Jones Industrial Average futures are trading at 30415, down 56 or -0.18%. On Wednesday, the SPDR Dow Jones Industrial Average ETF (DIA) settled at $304.51, down $0.78 or -0.26%.

Powell’s Remarks Weigh on Equities

Wednesday’s late session weakness and today’s early dip came after Federal Chair Jerome Powell told Congress the central bank is “strongly committed” to bringing down inflation. He also noted that a recession is a “possibility,” a fear that has continued to weigh on Wall Street.

Powell’s Testimony Continues

On Thursday, investors will be looking forward to fresh jobless claims data and Flash PMI reports.

Traders are expecting unemployment claims to have risen 227K, slightly below the previous week’s 229K. Look for the Flash Manufacturing PMI to show a 56.0 reading. Traders are expecting the Flash Services PMI to come in at 53.9.

Powell will also give remarks to the House, after having addressed the Senate Wednesday. The remarks are part of a congressionally mandated semiannual report on monetary policy.

Daily September E-mini Dow Jones Industrial Average

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 29639 will signal a resumption to the downtrend. A move through 33255 will change the main trend to up.

Like the main trend, minor trend is down. A trade through 30999 will change the minor trend to up. This will shift momentum to the upside.

The minor range is 30999 to 29639. The market is currently straddling its pivot at 30319.

The short-term range is 33255 to 29639. Watch for a surge into the retracement zone at 31447 to 31874 if the minor trend changes to up.

Daily Swing Chart Technical Forecast

Trader reaction to the minor pivot at 30319 will determine the direction of the September E-mini Dow Jones early Thursday.

Bullish Scenario

A sustained move over 30319 will indicate the presence of buyers. Taking out yesterday’s high at 30770 will indicate the buying is getting stronger. This could lead to a test of the minor top at 30999.

Taking out 30999 will change the minor trend to up. This could create the momentum needed to challenge 31447 – 31874.

Bearish Scenario

A sustained move under 30319 will indicate the presence of sellers. The first downside target is 30204.  Look for a retest of the main bottom at 29639 if 30204 fails as support. This is a potential trigger point for an acceleration into the February 1, 2021 main bottom at 20927.

For a look at all of today’s economic events, check out our economic calendar.

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.