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James Hyerczyk
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E-mini Dow Jones Industrial Average

December E-mini Dow Jones Industrial Average futures are heading down on Friday and in a position to finish lower for a second consecutive week. After a pretty mundane trade earlier in the session, sellers came in hard after reports said the White House is considering limits on U.S. investment into China. The move erased the optimism that had been building all week over the restart of trade talks on October 10 and aggravating, but not escalating the trade dispute between the two economic powerhouses.

At 19:37 GMT, December E-mini Dow Jones Industrial Average futures are trading 26751, down 144 or -0.54%.

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If China considers the anticipated move by the United States an escalation then they could cancel the meeting, claiming that once again the U.S. is not operating on good faith. This would be extremely bearish for stocks.

Daily December E-mini Dow Jones Industrial Average

Daily Technical Analysis

The main trend is down according to the daily swing chart. A trade through 26686 will signal a resumption of the downtrend after three days of sideways price action. The main trend will change to up on a trade through 27312.

The minor trend is also down. A move through 27112 will change the minor trend to up. This will also shift momentum to the upside.

The minor range is 27312 to 26686. Its 50% level or pivot at 26999 is resistance.

The short-term range is 25244 to 27312. Its retracement zone at 26278 to 26034 is the primary downside target.

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Daily Technical Forecast

Based on the early price action and the current price at 26751, the direction of the December E-mini Dow Jones Industrial Average futures contract into the close is likely to be determined by trader reaction to the uptrending Gann angle at 26716.

Bearish Scenario

A sustained move under 26716 will indicate the presence of sellers. This could trigger a quick break into 26686. Taking out this minor bottom is likely to lead to a test of the downtrending Gann angle at 26543.

The angle at 26543 is a potential trigger point for an acceleration to the downside with the next target the short-term 50% level at 26278. If this level fails then look for the selling to possibly extend into the short-term Fibonacci level at 26034, followed by another uptrending Gann angle at 25980.

Bullish Scenario

A sustained move over 26716 will signal the presence of buyers. If this move creates enough upside momentum then look for the rally to possibly extend into a downtrending Gann angle at 26959, followed by the short-term pivot at 26999.

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