E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Building Support for Rally into 27400
December E-mini Dow Jones Industrial Average futures are surging Monday, boosted by bargain hunters following last week’s brutal sell-off. The move is taking place a day ahead of the U.S. presidential election, which could be the source of excessive volatility if the results are contested by either candidate.
Ahead of the election, Joe Biden holds a substantial national lead over President Donald Trump. The former vice-president garnered 52% of support from registered voters versus 42% for the president, according to a NBC News/Wall Street Journal poll from Sunday.
At 16:22 GMT, December E-mini Dow Jones Industrial Average futures are trading 26770, up 376 or +1.42%.
The Senate election could also be crucial for the markets as many key policy shifts including fiscal stimulus hinge on who holds the majority control.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. A trade through 25953 signals a resumption of the downtrend, while a move through 25777 will reaffirm the downtrend.
The minor trend is also down. A new minor bottom was formed at 25953. A trade through 28392 will change the minor trend to up. This will also shift momentum to the upside.
The main range is 24377 to 29050. Its retracement zone at 26714 to 26162 is potential support. The market has been straddling this zone the last four sessions.
The minor range is 28846 to 25953. Its retracement zone at 27400 is a potential upside target. Since the main trend is down, sellers could come in on a test of this area.
Daily Swing Chart Technical Forecast
The early price action indicates that the direction of the December E-mini Dow Jones Industrial Average futures contract the rest of the session on Monday is likely to be determined by trader reaction to the main 50% level at 26714.
A sustained move over 26714 will indicate the presence of buyers. If this move can create enough upside momentum then look for a possible extension of the rally into the minor 50% level at 27400.
A sustained move under 26714 will signal the presence of sellers. This will indicate the buying isn’t strong enough to continue to fuel the rally. This could lead to a retest of the Fibonacci level at 26162, followed by the main bottom at 25953.
The longer the market spends under 26162, the greater the chances of an acceleration to the downside.
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