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E-mini Dow Jones Industrial Average (YM) Futures Analysis – Weekly Upside Bias as Long as 25866 Holds as Support

By:
James Hyerczyk
Published: Nov 12, 2018, 06:20 UTC

Based on last week’s price action and the close at 25973, the direction of the December E-mini Dow Jones Industrial Average futures contract this week is likely to be determined by trader reaction to the short-term Fibonacci level at 25866.

E-mini Dow Jones Industrial Average

December E-mini Dow Jones Industrial Average futures are trading higher early in the session on Monday. Buyers are trying to resume last week’s rally. The move was fueled by the outcome of the U.S. mid-term elections which met expectations, while failing to generate excessive volatility as widely expected. The election resulted in a split Congress – the Democrats regained the House and the Republicans retained control of the Senate. Investors reacted positively to the news because it lifted a veil of uncertainty that had fueled recent volatility in the market.

E-mini Dow Jones Industrial Average
Weekly December E-mini Dow Jones Industrial Average

Weekly Swing Chart Technical Analysis

The main trend is up according to the weekly swing chart. Despite the recent steep sell-off, the swing bottom held at 24000. Therefore, the trend never changed to down. Momentum, however, did shift to the downside.

The weekly closing price reversal bottom at 24086 and the subsequent confirmation of the chart pattern last week shifted momentum back to the upside.

A trade through 26966 will signal a resumption of the uptrend. A move through 24086 will negate the closing price reversal bottom and change the main trend to down.

This week’s session also opens with the Dow on the strong side of several retracement levels. This is also helping to give the market an upside bias.

The short-term range is 26966 to 24086. Its retracement zone at 25866 to 25526 is the first support area.

The intermediate range is 24000 to 26966. Its retracement zone at 25483 to 25133 is the second support area.

The main range is 23500 to 26966. Its retracement zone at 25233 to 24824 is controlling the longer-term direction of the market.

The first support cluster is 25526 to 25483. The second support cluster is 25233 to 25133.

Weekly Swing Chart Technical Forecast

Based on last week’s price action and the close at 25973, the direction of the December E-mini Dow Jones Industrial Average futures contract this week is likely to be determined by trader reaction to the short-term Fibonacci level at 25866.

A sustained move over 25866 will indicate the presence of buyers. Taking out last week’s high at 26268 will indicate the buying is getting stronger. This could trigger a potential acceleration to the upside with the next target the all-time high at 26966.

A sustained move under 25866 will signal the presence of sellers. If this move creates enough downside momentum then look for the selling to extend into the first support cluster at 25526 to 25483. Watch for a technical bounce on the first test of this area. If it fails then look for the selling pressure to increase with 25233 to 25133 the next likely target.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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