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James Hyerczyk
E-mini Dow Jones Industrial Average

December E-mini Dow Jones Industrial Average futures are trading slightly lower at the mid-session on Friday in a trading session that can best be described as choppy and two-sided.

Blue chip stocks started the session higher in reaction to speculation that the U.S. and China had agreed to a trade deal on Thursday. The market turned lower shortly before the cash market opening after President Trump tweeted that reports were wrong and fake news.

Shortly after the cash market opening, prices stabilized and the Dow rallied after Chinese officials said China and the U.S. reached an agreement on the text of the phase one trade deal. Since then, the session has been filled with two-sided price behavior, which appears to be making today’s events a “buy the rumor, sell the fact” situation.

At 17:01 GMT, December E-mini Dow Jones Industrial Average futures are trading 28129, down 2 or -0.01%.

Daily December E-mini Dow Jones Industrial Average

Daily Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was reaffirmed earlier in the session. A move through the intraday high at 28303 will signal a resumption of the uptrend.

The main trend will change to down on a trade through 27312. This is highly unlikely, however, due to the prolonged move up in terms of price and time, the market is inside the window of time for a potentially bearish closing price reversal top.

The key level to watch is 28131. A close under this level will form a closing price reversal top. This won’t change the trend to down, but it will indicate the selling is greater than the buying at current price levels. If confirmed on Monday, this could lead to a 2 to 3 day correction.

The short-term range is 27312 to 28303. Its 50% level at 27808 is a potential downside support target.

The main range is 26588 to 28303. Its retracement zone at 27446 to 27243 is the primary downside target.


Daily Technical Forecast

Based on the early price action and the current price at 28129, the direction of the December E-mini Dow Jones Industrial Average futures contract the rest of the session on Friday is likely to be determined by trader reaction to yesterday’s close at 28131.

Bullish Scenario

A sustained move over 28131 will indicate the presence of buyers. If this move creates enough upside momentum then look for a possible retest of today’s intraday high at 28303.

Taking out 28303 will indicate the buying is getting stronger. This could lead to a test of the steep uptrending Gann angle at 28336. Crossing to the strong side of this angle will put the Dow in an extremely bullish position.

Bearish Scenario

A sustained move under 28131 will signal the presence of sellers. If this move creates enough downside momentum then look for a possible break into an uptrending Gann angle at 27824. This is followed by the short-term pivot at 27808.

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