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

September E-mini Dow Jones Industrial Average futures are trading lower late in the session on Friday after giving back its earlier gains. A strong reversal down in the S&P 500 Index and NASDAQ Composite Index spread to the blue chip Dow as technology shares took a beating from a pair of bad earnings reports from Snap and Twitter.

At 17:53 GMT, September E-mini Dow Jones Industrial Average futures are at 31772, down 235 or -0.73%. This is down from an intraday high of 32193. The SPDR Dow Jones Industrial Average ETF (DIA) is at $319.08, down $1.33 or -0.41%.

In stock related news, shares of Verizon Communications are down over 6%, followed by Intel Corp, off nearly 3.5%. Microsoft is down over 1.5% and Apple is off almost 1.0%.

On the plus side, American Express is bucking the trend, up nearly 2.0%, followed by Procter & Gamble’s 1.6% gain.

Economic Data Weighs on Sentiment

In addition to worries about earnings, concerns over the state of the U.S. economy also weighed on sentiment after the release of more downbeat economic data.

A preliminary reading on the U.S. PMI Composite output index – which tracks activity across the services and manufacturing sectors – fell to 47.5, indicating contracting economic output. That’s also the index’s lowest level in more than two years.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, the late session price action suggests momentum may be shifting to the downside.

A trade through 32193 will signal a resumption of the uptrend. A move through 30109 will change the main trend to down.

The minor trend is also up. A trade through 31504 will change the minor trend to down. This will shift momentum to the downside.

Short-Term Outlook

Trader reaction to 32007 is likely to determine the direction of the September E-mini Dow Jones futures contract into the close on Friday.

Bearish Scenario

A sustained move under 32007 will indicate the presence of sellers. A trade through the Fibonacci level at 31874 will indicate the selling pressure is getting stronger. This could trigger a late session break into the minor bottom at 31504.

Bullish Scenario

A sustained move over 32007 will signal the presence of buyers. If this creates enough upside momentum then look for a move into the intraday high at 32193.