Technical Analysis

Technical Outlook: E-mini Dow Jones (YM) Futures

  • Medium Term Outlook on Weekly Chart looks bearish
  • Fibonacci Fan & Retracements Show more downside potential
  • Possible Scalping opportunities abound for the Bulls

Medium Term Outlook

The fact that YM has broken below the previous 2022 low, coupled with the Feds stance on interest rate policy, gives much power to the bear case. There is a pocket of support just below $29,639, which was 2020’s high. The E-mini Dow (YM) is currently trading within the support zone and is proving to have some sort of buying pressure. According to the Fibonacci Fan and retracements, which we will analyze later on in this article, we see more downside in YM unless there is a drastic change in the CPI data. $27,459 is a very realistic target for bears at the 50% Fibonacci level, but keep in mind that this is using the weekly chart, and there could be relief rallies before we see that bearish target reached.

Fibonacci Fan and Retracement Levels

Connecting Fibonacci retracements and a Fan from the 2020 low to 2022 high, we see a very interesting picture being painted. The technical levels are structured with a lot of conviction because of the number of times the Fan and retracements have been successfully tested.

The 61% level at $29,671 has been breached to the downside this week, and the next Fib target is down at $27,459, as mentioned above. The 75% line for the Fibonacci Fan indicated in blue will also intersect the $27,459 level around the time the 61% retracement is tested.

YM Weekly Chart WIth Fibonacci Fan and Retracements

Potential Scalps For Bulls

If we narrow down to smaller time frames, there could be a potential for bulls to find some trading opportunities as prices find footing within the support pocket mentioned above. We could see several relief rallies out of this zone as bulls attempt to send the price higher and bears take profits on their shorts. As long as risk is well defined and stop losses are strictly abided by.

This strategy is risky in the medium term since our outlook is still bearish, but we always like to give both sides of the story in these articles.

YM Daily Chart