E-mini Dow Jones Industrial Average (YM) Futures Analysis – December 26, 2018 Forecast

March E-mini Dow Jones Industrial Average futures are expected to open higher after reversing earlier session weakness. The turnaround has also put the index in a position to post a potentially bullish closing price reversal bottom. This won’t signal a change in trend, but it could lead to the start of a 2 to 3 day counter-trend rally.

At 1549 GMT, March E-mini Dow Jones Industrial Average futures are trading 21814, up 114 or +0.53%.

Daily Technical Analysis

The main trend is down according to the daily swing chart, however, the session begins with the Dow inside the window of time for a closing price reversal bottom. This chart pattern will not change the main trend to up, but it indicate the buying is greater than the selling at current price levels.

The Dow is currently trading inside a major long-term retracement zone at 22151 to 21011. This zone is controlling the longer-term direction of the index.

Daily Technical Forecast

Based on the early price action, the direction of the March E-mini Dow Jones Industrial Average on Wednesday is likely to be determined by trader reaction to Monday’s close at 21700.

Bullish Scenario

A sustained move over 21700 will indicate the buying is getting stronger. This will put the Dow in a position to form a closing price reversal bottom. If this move creates enough upside momentum then look for a rally into the main 50% level at 22151. We could see sellers on the first test of this level. Overtaking it however, is likely to drive the Dow into the steep downtrending Gann angle at 22556.

Since the main trend is down, sellers are likely to show up on a test of the Gann angle at 22556. This angle is a potential trigger point for an acceleration to the upside with a 50% level at 23156 the first major upside target.

Bearish Scenario

A sustained move under 21700 will signal the presence of sellers. If this generates enough downside momentum then look for a possible retest of today’s low at 21452. If this fails then the downtrend will resume with the major Fibonacci level at 21011 the next target.