E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Bearish Divergence from Broader Indexes

December E-mini Dow Jones Industrial Average futures contracts are trading lower late in the session on Thursday after hitting an all-time high earlier in the session. The blue chip index is being dragged lower by big banks JPMorgan Chase & Co and Goldman Sachs Group, which are currently down 1.95% and 2.86% respectively.

At 19:34 GMT, December E-mini Dow Jones Industrial Average futures are trading 35926, down 109 or -0.30%.

Technically, the market is in a position to post a potentially bearish closing price reversal top that could trigger the start of a 2 to 3 day correction. Furthermore, the Dow is diverging from the broader-based S&P 500 and NASDAQ Composite that could be an early sign that the overall stock market is getting ready for a correction of its latest rally.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through the intraday high at 36076 will signal a resumption of the uptrend. The main trend will change to down on a move through 33984.00.

The minor trend is also up. A trade through 35383 will change the minor trend to down. This will shift momentum to the downside.

The minor range is 35383 to 36076. Its 50% level or pivot at 35730 is the nearest support level.

The second minor range is 33984 to 36076. If the minor trend changes to down then look for the selling to extend into its retracement zone at 35030 to 34783.

The short-term range is 33383 to 36076. Its retracement zone at 34730 to 34412 is the primary downside target.

Daily Swing Chart Technical Forecast

The direction of the December E-mini Dow Jones Industrial Average into the close on Thursday is likely to be determined by trader reaction to 36035.

Bullish Scenario

A sustained move over 36035 will indicate the presence of buyers. If this move generates enough late session upside momentum then look for a retest of the record high at 36076. This is also the trigger point for an acceleration to the upside.

Bearish Scenario

A sustained move under 36035 will signal the presence of sellers. The first downside target is the pivot at 35730. We could see a technical bounce on the first test of the pivot, but if it fails then look for the selling to possibly extend into the minor bottom at 35383 over the next 2 to 3 sessions.

Side Notes

A close under 36035 will form a closing price reversal top. If confirmed on Friday the look for the start of a near-term correction with a potential break into 34783 to 34730.