E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Forming Closing Price Reversal Bottom

December E-mini Dow Jones Industrial Average futures are trading higher at the cash market close on Wednesday as surging crude prices boosted energy-related stocks and a couple of U.S. reports indicated the economic recovery is still intact a day after U.S. consumer price data suggested inflation has crested.

At 20:07 GMT, December E-mini Dow Jones Industrial Average futures are trading 34515, up 51 or +0.15%.

In economic news, import prices posted their first monthly decline since October 2020, in the latest sign that the wave of price spikes has crested, further supporting the Federal Reserve’s position that current inflationary pressures are transitory.

In stock related news, Apple Inc snapped a decline over recent sessions following an adverse court ruling on its business practices, and a lukewarm response to its event on Tuesday where it unveiled updates to its iPhone and other gadgets.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through today’s intraday low will signal a resumption of the downtrend. The next main bottom is 33533.

A move through 35383 will change the main trend to up. This is highly unlikely, but due to the prolonged move down in terms of price and time, the Dow is ripe for a potentially bullish closing price reversal bottom.

The minor range is 35076 to 34379. Its 50% level or pivot at 34728 is the first potential upside target.

The short-term range is 35383 to 34379. Its retracement zone at 34881 to 34999 is primary upside target area. Since the main trend is down, sellers could show up on the first test of this zone. They are going to try to form a potentially bearish secondary lower top.

Short-Term Outlook

The direction of the December E-mini Dow Jones Industrial Average into the close on Wednesday will be determined by trader reaction to 34464.

Bullish Scenario

A sustained move over 34464 will indicate the presence of buyers. Overtaking the 50% level at 34481 will indicate the buying is getting stronger.

If these move creates enough upside momentum then look for the buying to continue early Thursday with 34728 the minimum upside target.

Bearish Scenario

A sustained move under 34464 will signal the presence of sellers. This could generate an early downside bias on Thursday. The first target is 34379, followed by the main Fibonacci level at 34257.

Watch for a technical bounce on the first test of 34357. If this level fails to hold as support then don’t be surprised by an acceleration to the downside.

The daily chart indicates there is plenty of room to the downside with 33533 the next major target.