E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Momentum May Be Shifting to Downside

December E-mini Dow Jones Industrial Average futures are inching lower early Tuesday as traders continued to monitor the negotiations in Washington for additional fiscal stimulus while the U.S. coronavirus caseload continued to rise.

Some traders are saying that fresh Sino-U.S. tensions over Hong Kong are putting a dent in sentiment, while others are saying that potentially bearish comments from several major investment banks are helping to cap the upside.

At 07:59 GMT, December E-mini Dow Jones Industrial Average futures are trading 29984, down 73 or -0.24%.

According to CNBC, Republican and Democratic leaders said Monday that Congress is trying to extend government funding for an additional week to try to strike a deal on new COVID-19 aid. The news came after a bipartisan group of senators unveiled a $908 billion stimulus proposal last week.

Calls for a new aid bill being pushed through before year-end have grown recently as U.S. employment growth continues to slow down and the number of COVID-19 cases keeps rising.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, but Monday’s closing price reversal top may be signaling a shift in momentum.

A trade through 29954 will confirm the potentially bearish chart pattern, while a move through 30265 will negate the pattern and signal a resumption of the uptrend.

A closing price reversal top is not a change in trend, but it could trigger the start of a 2 to 3 day correction. A trade through 29428 will change the main trend to down.

The minor trend is also up. A trade through 29589 will change the minor trend to down. This will confirm the shift in momentum.

The minor range is 29428 to 30265. Its 50% level at 29847 is the first downside target.

The second minor range is 28328 to 30265. Its 50% level at 29297 is the next potential downside target.

The short-term range is 25953 to 30265. Its retracement zone at 28109 to 27600 is a value area.

Daily Swing Chart Technical Forecast

The direction of the December E-mini Dow Jones Industrial Average on Tuesday is likely to be determined by trader reaction to 29847.

Bullish Scenario

A sustained move over 29847 will indicate the presence of buyers. If this creates enough upside momentum then look for a retest of 30265. Taking out this level will signal a resumption of the uptrend and could trigger an acceleration if there is sizable volume behind the move.

Bearish Scenario

A sustained move under 29847 will signal the presence of sellers. This could trigger an acceleration to the downside with the first potential downside target 29589, followed by 29428 and 29297.