E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Rate hike fears fuel profit-taking

September E-mini Dow Jones Industrial Average futures were higher on Thursday, despite giving back almost all of their earlier gains. Nonetheless, the blue-chip moving average bucked the trend, with the broader S&P 500 Index and NASDAQ 100 Index posting potentially bearish close reversal spikes.

On Thursday, the September E-mini Dow Jones Industrial Average futures settled at 33304, up 44 or +0.13%. This was a fall from an intraday high of 33625. The SPDR Dow Jones Industrial Average ETF (DIA) closed at $333.76, up $0.56, or +0.17%.

Lower inflation will not stop Fed rate hikes

Equity markets were weighed down by concerns that slowing inflation would not ease the US Federal Reserve’s aggressive rate hikes. Wednesday’s CPI decline and Thursday’s PPI decline prompted bets in futures markets that the Fed would hike rates by 50 basis points in September, rather than 75 basis points as expected earlier in the week. However, Fed policymakers remain adamant that they will tighten monetary policy until inflationary pressures fully subside.

Weekly US jobless claims rise

In the economic news, the number of Americans filing new jobless claims rose for the second straight week, pointing to a further weakening of the job market despite still tight conditions as the Federal Reserve seeks to curb demand to stave off inflation to tame.

Mixed Dow Components: Walt Disney Up, Johnson & Johnson Down

In terms of for-profit news, Walt Disney rose 4.7% as the media giant overtook rival Netflix Inc with 221 million streaming customers and announced it would raise prices for customers who want to watch Disney+ or Hulu ad-free.

Johnson & Johnson shares fell 2.07% after the company announced it will end global sales of talc-based baby powder in 2023, more than two years after it ended U.S. sales of a product which resulted in thousands of consumer protection lawsuits.

Daily September E-mini Dow Jones Industrial Average

Daily swing chart technical analysis

The main trend is up according to the daily swing chart. A trade above 33625 will signal a resumption of the uptrend. A move through 34011 will reconfirm the uptrend. The main trend will turn down on a trade above 32342.

On the downside, possible support is a Fibonacci level at 33202, a minor pivot at 32984 and a 50% level at 32522.

Swing chart daily technical forecast

Trader reaction to the Fibonacci level at 33202 will likely dictate the direction of the September E-mini Dow Jones Industrial Average early Friday.

bullish scenario

Continued movement above 33202 indicates the presence of buyers. If this generates enough upward momentum then look for a test of yesterday’s high at 33625. Taking out this level could trigger an intraday rally to the major May 5th high at 34011.

Bearish Scenario

Continued movement below 33202 will signal the presence of sellers. The first target is the minor pivot at 32984. If this level fails as support, look for selling that extends to the 50% level at 32522.