September DOW Futures Continue To Show Weakness

September E-mini DOW futures continue to weaken as September grinds on. Following a bullish August, traders are beginning to show caution amid looming FED rate hikes. With the September FOMC meeting rapidly approaching, sentiment toward equities is shifting. It is going to be fascinating to see if the U.S. indices threaten long-term correction in the coming months.

As we talked about yesterday, the early part of this week is sparsely populated with economic events. The action will pick up with Thursday’s U.S. CPI release and Friday’s Retail Sales reports. Until then, things will be quiet on the official economic news front.

September E-Mini DOW Futures

This morning’s Wall Street open has brought a test of several downside support levels into play for September E-mini DOW futures. Price has fallen below 25,800 and may drive toward a key technical area.

Here are the levels to watch for the remainder of the session:

• Support(1): Bollinger MP, 25,771
• Support(2): Daily SMA, 25,718
• Support(3): Macro 38% Retracement, 25,715

Overview: Today’s Wall Street open has been another red one, with sellers dominating the action. As a result, both U.S. indices are off moderately, led by an 80 point loss in the DJIA.

The negative early tone may drive the September E-mini DOW to a test of the 38% macro retracement (25,715). This is a key technical level. If it holds, then an intermediate-term bullish bias remains intact. If not, we may be in for a significant retracement into August’s range.