E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Inside Move Suggests Investor Indecision

December E-mini Dow Jones Industrial Average futures are inching lower late in the session on Wednesday underpinned by vaccine optimism and a surge in component Boeing after it won U.S. approval to resume flights of its 737 MAX jet.

The planemaker’s shares jumped about 6.5% in premarket trading as it geared up to resume deliveries of the jet after a 20-month grounding following two fatal crashes.

At 19:42 GMT, December E-mini Dow Jones Industrial Average futures are trading 29636, down 84 or +0.28%.

The news also lifted shares of airlines. American Airlines gained 1.9% and Southwest Airlines added 2.5% as the carriers laid out plans to fly the aircraft again.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through the two highs at 29998 and 30000 will signal a resumption of the uptrend. The main trend will change to down on a move through the nearest main bottom at 25953.

The minor trend is also up. Taking out a pair of minor bottoms at 28815 and 28781 will change the minor trend to down. This will also shift momentum to the downside.

The minor range is 28328 to 30000. Its 50% level at 29164 is support. Trader reaction to this level will determine the direction of the Dow the rest of the week.

The short-term range is 25953 to 30000. If the minor trend changes to down then look for the selling to possibly extend into its retracement zone at 27977 to 27499.

Short-Term Outlook

The Dow is trading in the middle of the support at 29164 and the resistance at 29998 – 30000.  Although the trend is up, momentum is struggling.

If momentum shifts to the downside then look for a break into at least 29164. If this fails then look for a move into 28815 and 28781.

If momentum continues to lean to the upside then with enough buyers, we could see a retest of 29998 to 30000.

Side Notes

Two consecutive inside moves suggests investor indecision and impending volatility. It also indicates that investors are waiting for a catalyst before deciding on the next major move.