E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Formed Potentially Bearish Closing Price Reversal Top

June E-mini Dow Jones Industrial Average futures settled lower on Tuesday, producing a technically bearish closing price reversal top in the process. The move also ended the Dow’s 5-day winning streak. The selling was fueled by weakness in components J.P. Morgan Chase and Apple. The catalysts for the selling pressure were conflicting reports over the progress of U.S.-China trade negotiations.

In the cash market, the blue chip Dow Jones Industrial Average settled at 25887.38, down 26.72 or -0.10%. June E-mini Dow Jones Industrial Average futures settled at 25911, down 54 or -0.21%.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. However, momentum has been trending higher since the formation of the closing price reversal bottom on March 8 at 25246. A trade through 26200 will change the main trend to down. A move through 25246 will negate the closing price reversal bottom and signal a resumption of the downtrend.

Tuesday’s closing price reversal top is potentially bearish. The chart pattern typically indicates the selling is greater than the buying at current price levels. If confirmed on a trade through 25847, it could trigger the start of a 2 to 3 day correction.

The short-term range is 25246 to 26145. Its retracement zone at 25696 to 25589 is the primary downside target.

Daily Swing Chart Technical Forecast

The direction of the June E-mini Dow Jones Industrial Average on Wednesday hinges upon trader reaction to yesterday’s low at 25847.

Taking out 25847 will confirm the closing price reversal top. If this move generates enough downside momentum then look for the selling to extend into at least 25696 to 25589. After a test of this zone, the direction of the Dow the rest of the session on Wednesday is likely to be determined by the Fed’s monetary policy announcements and economic projections.

Overtaking 26145 will negate the closing price reversal top. This could drive the Dow into the next main top at 26200. A breakout over this level will indicate the buying is getting stronger with the next target the 26263 main top.