December E-mini Dow Jones Industrial Average futures are trading higher shortly after the opening. The catalyst behind the rally is stronger-than-expected earnings from IBM. This news has helped boost the Dow over 100 points on Wednesday.
Daily Technical Analysis
The main trend is up according to the daily swing chart.
There is no resistance at current price levels so the best sign of a short-term top will be a closing price reversal top.
Now that the market has produced a higher-high on the daily chart, the key level to watch all session is yesterday’s close at 22951. A sustained move under this level will indicate the selling is greater than the buying at current price levels.
The trend and the momentum are strong so it doesn’t make sense to try to pick a top. Turning lower for the session will indicate a shift in intraday momentum to down. This move may start to bring in the profit-takers and counter-trend short sellers.
The daily chart indicates the Dow is making an unusual chart pattern. It is currently splitting a pair of uptrending Gann angles. I don’t think it will catch up to the steep uptrending angle, but if we do see a break then the primary downside target will be a pair of uptrending angles at 22718 and 22675.
Look for the uptrend to continue, but be prepared for a closing price reversal top.