E-mini Dow Jones Industrial Average (YM) Futures Analysis – Straddling Weekly Retracement Zone at 24824 to 25233

After successfully testing a four-month low earlier in the week, the December E-mini Dow Jones Industrial Average is now in a position to post a potentially bullish weekly closing price reversal bottom. The chart pattern does not indicate a change in trend, but it is a sign that the buying is greater than the selling at current price levels.

Weekly Swing Chart Technical Analysis

Due to the size of the rally from late June to early October, the main trend is up on the weekly chart despite the steep four-week sell-off. However, momentum is trending lower. The main trend will change to down on the weekly swing chart when sellers take out 24000. This could lead to a further decline into a pair of bottoms at 23580 and 23500.

The minor trend is down. It turned down the week-ending October 12. This is why the momentum shifted to the downside.

The contract range is 23500 to 26966. Its retracement zone is 25233 to 24824. The Dow is currently trading inside this zone. It is controlling the longer-term direction of the market.

The main range is 24000 to 26966. Its retracement zone at 25133 to 25483 is resistance.

The short-term range is 26966 to 24086. Its retracement zone at 25526 to 25866 is the next resistance target.

Weekly Swing Chart Technical Forecast

Based on the price action this week, the direction of the December E-mini Dow Jones Industrial Average the rest of the week is likely to be determined by trader reaction to last week’s close at 24746.

Bullish Scenario

A sustained move over 24746 will indicate the presence of buyers. This will also put the Dow in a position to form a closing price reversal bottom. Any rally is likely to be labored due to potential resistance levels at 25133 and 25233. The market begins to expand over 25233 with a resistance cluster at 25483 to 25526 the next likely upside target.

Taking out 25526 could trigger a surge into 25866. This is the trigger point for an acceleration to the upside since there is no resistance until 26966.

Bearish Scenario

A sustained move under 24746 will signal the presence of sellers. This could lead to a retest of 24086, followed by 24000. If this level fails then look for the selling to extend into 23580 and 23500.