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James Hyerczyk
E-mini Dow Jones Industrial Average
E-mini Dow Jones Industrial Average

December E-mini Dow Jones Industrial Average futures are expected to open higher based on the pre-market trade. The rally is being driven by momentum following the confirmation of yesterday’s closing price reversal bottom. The chart pattern does not signal a change in trend, but it could lead to a 2 to 3 day counter-trend rally.

At 1300 GMT, December E-mini Dow Jones Industrial Average futures are trading 24710, up 220 or +0.90%.

Daily December E-mini Dow Jones Industrial Average

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, however, momentum is trending higher. A trade through 26088 will change the main trend to up.

On Monday, the Dow formed a potentially bullish closing price reversal bottom. The chart pattern was confirmed earlier today, shifting momentum to the upside. A trade through 23894 will negate the closing price reversal bottom and signal a resumption of the downtrend.

The closing price reversal bottom doesn’t mean the trend has changed to up, but it could lead to the start of a 2 to 3 day counter-trend rally.

The first upside target is a major Fibonacci level at 24824. Since the main trend is down, sellers could come in on a test of this level.

The new short-term range is 26088 to 23894. Its 50% level at 24991 is the next upside target. Once again, look for sellers on the first test of this level. Taking out this level will indicate the buying is getting stronger with a major 50% level at 25233 the next upside target.

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Daily Swing Chart Technical Forecast

Based on the closing price reversal bottom and the earlier price action, the direction of the December E-mini Dow Jones Industrial Average on Tuesday is likely to be determined by trader reaction to 24517.

Bullish Scenario

A sustained move over 24517 will indicate the presence of buyers. If this creates enough upside momentum then look for the rally to extend into 24824. Taking out this level will indicate the buying is getting stronger with 24991 the next target. This is a potential trigger point for an acceleration into a major 50% level at 25233.

Bearish Scenario

A sustained move under 24517 will signal the presence of sellers. This will indicate the breakout to the upside has failed. This could trigger a 50% retracement of the rally from 23894. This price is currently 24324. It will change if the Dow moves higher.

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