E-mini Dow Jones Industrial Average (YM) Futures Analysis – November 16, 2016 Forecast

December E-mini Dow Jones Industrial Average futures are trading lower shortly before the cash market opening. For a second day, the Dow is trading inside Monday range. This may be an indication that the market is going through a transition period that likely means investor sentiment is getting ready to shift to the downside.

Holding inside a range also indicates investor indecision and impending volatility. The longer the Dow sits in a range, the greater the reaction we can expect. The upside potential is unknown because we’ve never traded over 18918. The downside is known so sellers will have targets.

The recent rally has been all about upside momentum. The current price action indicates that investors may be shifting away from a momentum scenario to a value-based scenario. Investors may also be growing tired of chasing the market higher and would rather wait for a pullback into support or a value zone.

Technical Analysis

The main trend is up according to the daily swing chart. Taking out 18918 will signal a resumption of the uptrend. There are no targets at this time. Anyone that identifies resistance over 18918 is not telling the truth. There are only upside mathematical projections but no resistance.

If 17418 to 18918 becomes the new range then once the selling starts, its retracement zone at 18168 to 17991 will become the primary downside target.

Forecast

Based on the current price at 18832, the first downside target is an uptrending angle at 18698. This angle, moving up at a rate of 256 points per day, has been guiding the market higher since November 9.

If this angle fails as support then look out to the downside. If sellers start to hit the market hard, they may generate enough downside action over the near-term to eventually reach the retracement zone at 18168 to 17991 and the uptrending angle at 18058.

It think it’s safe to say that the direction of the Dow today will be determined by trader reaction to the angle at 18698.