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

December E-mini Dow Jones Industrial Average futures are trading lower shortly before the close on Tuesday, putting it in a position to end its four-day winning streak. Although investors are still holding out hope for a new fiscal stimulus bill from U.S. policymakers, this news was not enough to sustain the rally due to new concerns over a coronavirus vaccine.

At 20:15 GMT, December E-mini Dow Jones Industrial Average futures are at 28590, down 208 or -0.72%.

According to reports, Johnson & Johnson said it would pause its current COVID-19 trial. The company said it would take “a few days” to review its halted clinical trial following an unexplained illness in a study participant, possibly delaying results on one of the most closely watched efforts to contain the global pandemic.

In other news, Dow component Boeing Co dropped 2% as it lost another three orders for its grounded 737 MAX jet in September and delivered half the number of aircraft from the same month a year earlier.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 28846 will signal a resumption of the uptrend. The main trend will change to down on a move through 26407.

The minor trend is also up. A trade through 27531 will change the minor trend to down. This will also shift momentum to the downside.

The short-term range is 29050 to 26407. Its retracement zone at 28040 to 27729 is the nearest potential downside target. Since the main trend is up, buyers are likely to come in on a test of this zone.

Short-Term Outlook

The December E-mini Dow Jones Industrial Average futures contract posted an inside move on Tuesday. This chart pattern tends to indicate investor indecision and impending volatility. It does not indicate an impending change in trend.

At current price levels, the market is well-below major resistance, but at the same time, well above major support. This means the next major move is likely to be driven by momentum.

The return of strong upside momentum could lead to a breakout over 28846. This could trigger a rally into the September 30 main top at 29050. This is a potential trigger point for an acceleration to the upside.

A trade through Monday’s low at 28433 will be the first sign of a possible shift in momentum. If the selling pressure increases under this level then look for the selling to possibly extend into the short-term Fibonacci level at 28040. Watch for a technical bounce on the first test of this level.

If sellers take out 28040 then the 50% level at 27729 will become the next downside target. Once again look for buyers.

A break through 27729 could trigger the start of a steep sell-off.