E-mini Dow Jones Industrial Average (YM) Futures Analysis – Trading Inside Major Retracement Zone at 25337 to 24925
After hitting its highest level since the week-ending March 2, September E-mini Dow Jones Industrial Average futures settled lower last week, producing a potentially bearish closing price reversal top in the process.
The chart pattern doesn’t mean the trend is turning down, but it could trigger the start of a 2 to 3 week correction.
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Weekly Swing Chart Technical Analysis
The main trend is up according to the weekly swing chart. However, the price action has been essentially flat since early February with the market spending a lot of time straddling a major retracement zone.
The main range is 26672 to 23178. Its retracement zone at 24925 to 25337 is controlling the longer-term direction of the Dow. Currently, the market is testing this retracement zone.
The short-term range is 23978 to 25661. If this zone fails as support then look for a pullback into the short-term retracement zone at 24820 to 24621.
The key area to watch is a pair of 50% levels at 24925 to 24820. They form a support cluster that could attract buyers if tested.
Weekly Swing Chart Technical Forecast
Based on last week’s close at 25331, the direction of September E-mini Dow Jones Industrial Average futures contract this week is likely to be determined by trader reaction to the major Fibonacci level at 25337.
A sustained move over 25337 will indicate the presence of buyers. If this move creates enough upside momentum then look for a test of 25661. Taking out this level will negate the reversal top and shift momentum to the upside. The next target is 25868.
A sustained move under 25337 will signal the presence of sellers. The daily chart indicates there is plenty of room to the downside with the next target the major 50% level at 24925. This is followed by the short-term 50% level at 24820 and the Fibonacci level at 24621.