E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Look for Early Test of 34383 – 34619

December E-mini Dow Jones Industrial Average futures are trading nearly flat late in the session on Wednesday after clawing back nearly all of its earlier losses. The price action suggests investors are coming in on the dips while trying to build a support base across a major 50% to 61.8% retracement zone.

Traders appeared to shrug off another session of higher Treasury yields and stronger-than-expected U.S. labor market news. Meanwhile, investors grew more optimistic late in the session that congressional Democrats and Republicans could reach a deal to avert a government debt default. This helped turn the market higher shortly before the cash market close.

At 19:49 GMT, December E-mini Dow Jones Industrial Average futures are trading 34243, up 60 or +0.18%.

In economic news, the ADP National Employment Report released on Wednesday supported expectations that job growth picked up last month, though it has a poor record predicting the private payrolls count in the Labor Department’s more comprehensive and closely watched employment report.

The Dow was supported by shares of Microsoft, which rose about 1.37%. Procter & Gamble rose about 1.31% and Salesforce.com Inc was up about 1.17%.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, however, momentum shifted to the upside on Tuesday when buyers confirmed last week’s closing price reversal bottom.

A trade through 34934 will change the main trend to up. A move through 33383 will negate the closing price reversal bottom and signal a resumption of the downtrend.

The main range is 32835 to 35429. The Dow is currently trading on the strong side of its retracement zone at 34132 to 33826, making it new support.

The short-term range is 35383 to 33383. Its retracement zone at 34383 to 34619 is the primary upside target. This zone is the last potential resistance before the main top at 34934. It’s also a potential trigger point for an acceleration to the upside.

Daily Swing Chart Technical Forecast

The direction of the December E-mini Dow Jones Industrial Average into the close on Wednesday is likely to be determined by trader reaction to 34132.

Bullish Scenario

A sustained move over 34132 will indicate the presence of buyers. If this move creates enough upside momentum then look for the rally to possibly extend into 34383 to 34619.

Bearish Scenario

A sustained move under 34132 will signal the presence of sellers. If this move generates enough downside momentum then look for the selling to possibly extend into the Fibonacci level at 33826.

Side Notes

Look for an early upside bias on Thursday if the E-mini Dow closed over 34132. Since the main trend is down, look for sellers on the first test of 34383 to 34619.