E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Bulls Need to Defend 27013

December E-mini Dow Jones Industrial Average futures are down sharply in the pre-market session on Wednesday as traders digested the first U.S. presidential debate.

Futures rose slightly during the debate, but quickly gave up ground as the debate ended. The back and forth gyrations between the candidates likely created more uncertainty, encouraging investors to shed risky assets.

At 06:59 GMT, December E-mini Dow Jones Industrial Average futures are trading 27157, down 251 or -0.92%.

Ahead of the first debate, investors were hoping the process would lead to a clear winner on Election, but the response clearly shows that investors now feel this will be a drawn-out process. As long as the presidential race remains tight, traders can expect to see heightened volatility.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, however, momentum has been trending higher since the formation of the closing price reversal bottom on September 24.

A trade through 26407 will negate the closing price reversal bottom and signal a resumption of the downtrend. The main trend changes to up on a move through 28251.

The minor trend is also down. A trade through 27619 will change the minor trend to up. This will reaffirm the upside momentum.

The main range is 24377 to 29050. Its retracement zone at 26714 to 26162 is key support. This zone stopped the selling at 26407.

The short-term range is 29050 to 26407. Its retracement zone at 27729 to 28040 is resistance.

On the upside, the minor resistance zone is 27329 to 27547.

On the downside, the minor support is the 50% level at 27013.

In the early trade, the Dow is trading between the minor support and resistance.

Daily Swing Chart Technical Forecast

Based on the early price action, the reaction to the 50% level at 27013 is likely to determine the direction of the market.

Bullish Scenario

A sustained move over 27013 will indicate the presence of buyers. This will indicate the sell-off was just a normal correction of the recent three day rally. However, the market still faces headwinds at 27329, 27547 and 27619.

Upside momentum should start to pick-up if buyers can overcome 27619.

Bearish Scenario

Taking out and sustaining a break under 27013 will signal the presence of sellers. This could trigger a sharp break into the main 50% level at 26714, followed by the main bottom at 26407 and the main Fibonacci level at 26162.

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