E-mini Dow Jones Industrial Average (YM) Futures Analysis – Trend Up, But Needs to Hold 22898 to Sustain Rally

December E-mini Dow Jones Industrial Average futures are trading higher on Tuesday, boosted by strong quarterly earnings results from UnitedHealth Group and Johnson & Johnson. The price action in the cash market indicates the Dow may hit 23,000 today.

The Dow is also being supported by a rise in homebuilder confidence. The monthly sentiment index from the National Association of Home Builders rose 4 points to 68, the highest level since May of this year. A year ago, the index stood at 63.

Daily Technical Analysis

The main trend is up according to the daily swing chart. The Dow extended the rally earlier today when it traded through yesterday’s high at 22906.

The Dow also began today’s session up 16 market days from the last main bottom at 22174 on September 25. This puts the market in the window of time for a potentially bearish closing price reversal top.

Daily Forecast

Today’s higher-high has extended the rally. Based on this move, yesterday’s close at 22898 becomes the key level to watch today.

Holding above 22898 will give the Dow an upside bias. Falling below this level will indicate the selling is greater-than-the-buying at current price levels. This could lead to an intraday sell-off.

A close below 22898 will form the reversal top.

On the downside, the uptrending Gann angles, giving the Dow direction and supporting the uptrend, come in at 22686 and 22643.

Look for the uptrend to continue, but realize that a closing price reversal top could lead to the start of a 2 to 3 day correction.