E-mini Dow Jones Industrial Average (YM) Futures Analysis – Bearish Closing Price Reversal Top Confirmed by Break Under 23260

December E-mini Dow Jones Industrial Average futures posted a potentially bearish closing price reversal top last week. Although the chart pattern doesn’t mean the trend is getting ready to turn lower, it is a strong indication that the selling is greater than the buying at current price levels.

Weekly Technical Analysis

The main trend is up according to the weekly swing chart. However, the closing price reversal top may have shifted momentum to the downside.

A trade through 23557 will negate the reversal top and signal a resumption of the uptrend.

A move through 23260 will confirm the chart pattern. This could trigger the start of a 2 to 3 week correction with a retracement zone at 22551 to 22314 the primary downside target.

Weekly Technical Forecast

Based on last week’s close at 23382, the direction of the Dow this week is likely to be determined by trader reaction to 23557 and 23260.

Taking out 23557 with rising volume will signal a resumption of the uptrend. Taking out this level on low volume could set up another reversal top.

A break through 23260 will confirm the potentially bearish chart pattern. If selling volume increases on the move then look for a possible acceleration into the long-term uptrending angle at 23081. Since the main trend is up, we could see a technical bounce on the first test of this angle.

If sellers can drive the Dow through 23081 then look out to the downside since the next major target doesn’t come in until 22551. This is followed by a support cluster at 22314 to 22313. This is formed by a Fibonacci level and uptrending angle.

Basically, this week, we’re either going to extend the bull market or start a near-term correction under 23260.