James Hyerczyk
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E-mini Dow Jones Industrial Average

December E-mini Dow Jones Industrial Average futures are trading lower as we approach the mid-session on Tuesday. Earlier in the session, the Dow hit a record high, but the buying quickly evaporated as losses in Dow component Home Depot outweighed a jump in Boeing shares.

Home Depot shares dropped nearly 5% after disappointing some-store sales, a key metric for retailers, overshadowed better-than-expected earnings. The stock’s decline shaved off 80 points from the Dow. Boeing shares rose 0.4% after wrangling up 50 orders for the embattled 737 Max jet at the Dubai Air Show.

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The price action has produced an outside trading range, putting the Dow in a position to post a potentially bearish closing price reversal top on a close under Monday’s close at 28008.

At 16:17 GMT, December E-mini Dow Jones Industrial Average futures are trading 27888, down 118 or -0.42%.

Daily December E-mini Dow Jones Industrial Average

Daily Technical Analysis

The main trend is up according to the daily swing chart, however, momentum appears to be ready to shift to the downside with a close under 28008.

The minor trend is also up. A trade through 27337 will change the minor trend to down. This move will confirm any shift in momentum to down.

The first minor range is 27337 to 28128. Its 50% level or pivot at 27733 is the first downside target.

The second minor range is 26847 to 28128. Its retracement zone at 27488 is the second downside target.

The main range is 26588 to 28128. Its retracement zone at 27358 to 27176 is the primary downside target.


Daily Technical Forecast

Based on the early price action and the current price at 27888, the direction of the December E-mini Dow Jones Industrial Average the rest of the session on Tuesday is likely to be determined by trader reaction to Monday’s close at 28008.

Bearish Scenario

A sustained move under 28008 will indicate the presence of sellers. If the selling pressure is strong enough then look for the move to extend into the steep uptrending Gann angle at 27815. This angle, moving up at a rate of 64 points per day, has been guiding the market higher since the 25703 main bottom on October 3.

Look for a technical bounce on the first test of 27815. If it fails as support then look for the selling to extend into the 50% level at 27733. This level is a potential trigger point for an acceleration to the downside with the next target the 50% level at 27488.

Bullish Scenario

A sustained move over 28008 will signal the presence of buyers. If this move creates enough upside momentum then look for a retest of today’s intraday high at 28128.

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