E-mini Dow Jones Industrial Average (YM) Futures Analysis – Trader Reaction to 22313 Gann Angle Sets Tone This Week

December E-mini Dow Jones Industrial Average futures finished higher last week but underperformed the S&P 500 Index which posted a new all-time high. Both futures contract, however, posted new record higher closes.

Weekly Technical Analysis

The main trend is up according to the weekly swing chart. A trade through 22389 will signal a resumption of the uptrend. The main trend will turn to down on a trade through 21545.

The current rally is up five weeks from the last swing bottom the week-ending August 25. The last rally was 16 weeks before we saw two consecutive weeks of lower-lows. This tells us there may be plenty of room to the upside.

Weekly Forecast

Based on last week’s close at 22346, the direction of the Dow futures contract his week is likely to be determined by trader reaction to the steep short-term uptrending angle at 22313.

A sustained move over 22313 will indicate the presence of buyers. This should give the market enough upside momentum to overtake the minor top at 22389.

A sustained move under 22313 will signal the presence of sellers. The daily chart starts to open up to the downside under this angle with the next target angles coming in at 21929 and 21777.

The angle at 21777 is major because it has been guiding the Dow higher since the formation of the main bottom at 20241 during the week-ending April 21.

If the angle at 21777 fails to hold and the selling volume begins to increase, the sellers will go after the main bottom at 21545. This will not only change the main trend to down on the weekly chart, but it’s likely to trigger an acceleration to the downside.

Watch the price action and read the order flow at 22313 all week. Trader reaction to this angle will tell us if the buying is getting stronger, or if sellers are taking control.