E-mini Dow Jones Industrial Average (YM) Futures Analysis – Needs to Sustain Move Over 26820 or Closing Price Reversal Top Will Form

Dow Jones Industrial Average futures surged to the upside last week on the back of easing concerns over an escalation of the trade dispute between the United States and China. This week, the focus will remain on trade after China announced on Friday that it was cancelling the meeting with the United States. Investors will also get the chance to react to the widely expected Fed rate hike on Wednesday and the central bank’s monetary policy statement.

Last week, December E-mini Dow Jones Industrial Average futures settled at 26754, up 569 or +2.17%.

Weekly Swing Chart Technical Analysis

The main trend is up according to the weekly swing chart. A trade through 26820 will signal a resumption of the trend. The market also begins the week in the window of time for a potentially bearish closing price reversal top.

The minor trend is also up. A trade through 25784 will change the minor trend to down. This will also shift momentum to the downside.

The short-term range is 25784 to 26820. Its 50% level or pivot at 26302 is controlling the near-term direction of the index.

The intermediate range is 24970 to 26820. Its 50% level or pivot at 25895 is the next downside target.

The main range is 24000 to 26820. If the minor trend changes to down then look for a break into its retracement zone at 25410 to 25077.

Weekly Swing Chart Technical Forecast

Based on last week’s price action and the strong close at 26754, the direction of the December E-mini Dow Jones Industrial Average futures contract is likely to be determined by trader reaction to last week’s high at 26820.

A sustained move over 26820 will indicate the buying is getting stronger. There is no resistance so upside momentum will continue to carry the trade.

The inability to overcome 26820 will signal the selling is greater than the buying. This could trigger a pullback into the short-term 50% level at 26302. Watch for a technical bounce on the first test of this level. If it fails then look for the selling to drive the market into the next pivot at 25895 then the minor bottom at 25784.

The daily chart opens up to the downside under 25784 with 25410 the next target level.

A third scenario could develop. Buyers could take out 26820 then sellers could drive the market through 26754, turning it lower for the week. If they sustain this move then look for the formation of a weekly closing price reversal top. This could lead to the start of a 2 to 3 week correction.