E-mini Dow Jones Industrial Average (YM) Futures Analysis – Strengthens Over 25233, Weakens Under 25167

December E-mini Dow Jones Industrial Average futures plunged on Tuesday as investors expressed concerns over the impact of the trade dispute truce between the United States and China, and a Treasury rate inversion signaled a possible economic slowdown. In the cash market, the Dow posted its worst day since October 10. At its low of the day, the benchmark Dow had fallen more than 800 points.

On Tuesday, the December E-mini Dow Jones Industrial Average futures settled at 25046, down 800 or -3.19%.

The U.S. stock market will be closed Wednesday out of respect for former President George H.W. Bush’s funeral.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, the market has been rangebound since November 8. Tuesday’s sell-off, while dramatic, was only a normal retracement of the current six-day rally. A trade through 26088 will be a sign of strength, but a trade through 26268 will signal a resumption of the uptrend. The main trend will change to down on a trade through 24246, followed by another bottom at 24086.

The minor trend is also up. A new minor top was formed at 26088. A trade through this level will signal a resumption of the minor trend.

The market closed inside the main retracement zone at 25233 to 24824. The short-term retracement zone is 25167 to 24950.

On the upside, the retracement zone resistance is 25526 to 25866.

The tightest price cluster is 25167 to 25233. Another price cluster is 24950 to 24824.

Daily Swing Chart Technical Forecast

Based on Tuesday’s close at 25160 and the daily swing chart, the direction of the market when trading resumes on Thursday will likely be determined by trader reaction to the price cluster at 25233 to 25167.

Bullish Scenario

A sustained move over 25233 will signal the presence of buyers. If this move creates enough upside momentum, we could see the rally extend into the major 50% level at 25526. This is followed by the major Fibonacci level at 25866.

Overcoming 25866 will put the Dow in a position to continue the rally with the minor top at 26088 and the main top at 26268 the next likely targets.

Bearish Scenario

A sustained move under 25167 will indicate the presence of sellers. This could trigger a further decline into a short-term Fibonacci level at 24950, followed by a long-term Fibonacci level at 24824.

The daily chart opens up to the downside under 24824 with the next major targets coming in at 24246, 24086 and 24000.