June E-mini Dow Jones Industrial Average futures are trading slightly lower shortly before the cash market close after posting a two-sided trade throughout the session. Underpinning the blue chip index is a strong performance in bank and industrial stocks. Technology shares, however, were under pressure again as U.S. bond yields rose to a 14-month high.
At 19:42 GMT, June E-mini Dow Jones Industrial Average futures are trading 32968, down 64 or -0.19%.
The surge in Treasury yields led to a fresh round of sector rotation to go along with the quarterly rebalancing by pension fund managers. Economy-linked financial and industrials were the only sectors in positive territory, while technology and utilities posted the steepest declines.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. A trade through 33134 will signal a resumption of the main trend. A move through 31951 will change the main trend to down.
The minor range is 31951 to 33134. Its 50% level at 32543 is potential support.
The second minor range is 31613 to 33134. Its 50% level at 32365 is another potential support level.
The main range is 29450 to 33134. If the main trend changes to down then its retracement zone at 31292 to 30857 will become the primary downside target.
Tuesday’s inside move indicates investor indecision and impending volatility.
A sustained move over 33134 will indicate the presence of buyers. This could trigger an acceleration to the upside.
A sustained move under 32746 will signal the presence of sellers. If this creates enough downside momentum then look for a potential pullback into a pair of 50% levels at 32543 and 32365.
The biggest fear for long investors should be a closing price reversal top. While not necessarily a trend trading event, it could signal the start of a near-term correction.