E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Key Area to Watch is 26352 to 26358

December E-mini Dow Jones Industrial Average futures are trading higher shortly after the cash market opening. The early rally is being supported by a solid U.S. jobs report. According to a government report, the U.S. economy added 136,000 jobs in September. This was below the 145,000 forecast, however, the unemployment rate fell to 3.5%, a 50-year low. Average Hourly Wages also grew, but at a slower-than-expected pace.

At 13:31 GMT, December E-mini Dow Jones Industrial Average futures are trading 26312, up 132 or +0.50%.

The jobs report was considered bullish by stock investors because it dampened concerns over a recession. Earlier in the week, a disastrous ISM Manufacturing PMI report and a weaker-than-expected ISM Non-Manufacturing PMI report fanned the flames of recession.

Daily Technical Analysis

The main trend is down according to the daily swing chart. However, momentum shifted to the upside on Thursday with the formation of a closing price reversal bottom. The move isn’t likely to change the trend to up, but it could lead to a 2 to 3 day counter-trend rally.

The main trend will change to up on a trade through 27312. This is highly unlikely, but there is room for a normal 50% to 61.8% retracement. A trade through 25703 will negate the closing price reversal bottom and signal a resumption of the downtrend.

The main range is 25014 to 27312. Its retracement zone at 26163 to 25892 is potential support.

The short-term range is 27312 to 25703. Its retracement zone at 26508 to 26697 is the primary upside target. Since the main trend is down, sellers are likely to come in on a test of this area.

Daily Technical Forecast

Based on the early price action, and the current price at 26312, the direction of the December E-mini Dow Jones Industrial Average the rest of the session on Friday is likely to be determined by trader reaction to a pair of Gann angles at 26352 to 26358.

Bullish Scenario

A sustained move over 26358 will indicate the buying is getting stronger. If this move creates enough upside momentum then look for the rally to possibly extend into the 50% level at 26508, followed by the Fibonacci level at 26697. Look for sellers on a test of 26508 to 26697.

Bearish Scenario

A sustained move under 26352 will indicate the buying is drying up or the selling pressure is increasing. This could trigger a pullback into the main 50% level at 26163. This is a potential trigger point for an acceleration to the downside with the next target the main Fibonacci level at 25892.