E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Close Below 27380 Forms Potentially Bearish Closing Price Reversal Top

December E-mini Dow Jones Industrial Average futures are trading slightly better at the mid-session on Tuesday. This is a divergence from the broadly-based S&P 500 Index, which is trading lower. This should be a warning flag for investors that something may be wrong with the market at current price levels.

At 17:52 GMT, December E-mini Dow Jones Industrial Average futures are trading 27443, up 63 or +0.23%.

The story that U.S.-China trade relations from Friday is getting stale. Traders may be looking for fresh updates. Furthermore, investors may be concerned that China is pushing President Trump to remove more tariffs on about $125 billion worth of Chinese goods imposed in September as part of the “phase one” trade deal, reports said.

“Firmer commitments on lifting tariffs” are needed for China to pay a visit to the U.S., according to the South China Morning Post.

The lack of response from the U.S. to this request may be making investors nervous, leading them to curtail their buying.

Daily Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was confirmed earlier in the session when buyers took out yesterday’s high at 27450, on their way to a record high of 27493.

The main trend will change to down on a trade through the last main bottom at 26588. This is highly unlikely today, but due to the prolonged move in terms of price and time, the market is in the window of time for a closing price reversal top. This chart pattern won’t change the main trend to down, but it could shift momentum to the downside for 2 to 3 sessions.

The minor trend is also up. A trade through 26847 will change the minor trend to down. This will also shift momentum to the downside.

Daily Technical Forecast

Based on the earlier higher-high price action and the current price at 27443, the direction of the December E-mini Dow Jones Industrial Average the rest of the session is likely to be determined by trader reaction to Monday’s close at 27380.

Bullish Scenario

A sustained move over 27380 will indicate the presence of buyers. Taking out the intraday high at 27493 will indicate the buying is getting stronger.

Bearish Scenario

A sustained move under 27380 will signal the presence of sellers. This will also put the market in a position to form a potentially bearish closing price reversal top. If confirmed, this could trigger the start of a near-term correction.

The first downside target is a steep uptrending Gann angle at 27175. This angle, moving up at a rate of 64 points per day from the 25703 main bottom, has been guiding the market higher for 23 trading sessions.