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James Hyerczyk
E-mini Dow Jones Industrial Average

December E-mini Dow Jones Industrial Average futures finished higher on Friday, riding the tail of a strong performance in the technology sector. Nonetheless the Dow closed lower for the week, posting its longest weekly losing streak in a year after fears of an economic slowdown sparked a sell-off. The Dow ended the week with a fourth straight weekly decline, the longest weekly losing streak since August 2019.

On Friday, December E-mini Dow Jones Industrial Average futures settled at 27043, up 328 or +1.21%.

Several Dow components posted solid gains on Friday. Investors looking for a strong long-term performance were attracted to beat-up tech giants Apple and Intel.

Boeing Co gained 4.9% after Europe’s chief aviation safety regulator said the plane maker’s grounded 737 MAX could retrieve regulatory approval to resume flying in November and enter service by the end of the year. Boeing gave the Dow its biggest boost.

Daily December E-mini Dow Jones Industrial Average

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, however, momentum is trending higher.

Momentum shifted to the upside on Friday when buyers took out 26971, confirming Thursday’s closing price reversal bottom. The move doesn’t change the main trend to up, but it could fuel a 2 to 3 day counter-trend rally. A trade through 26407 will negate the closing price reversal top and signal a resumption of the downtrend.

The main trend changes to up on a trade through the last main top at 28251.

The main range is 24377 to 29050. Its retracement zone at 26714 to 26162 is support. This area stopped the selling at 26407 on Thursday.

The minor range is 28251 to 26407. Its retracement zone at 27329 to 27547 is the first upside target.

The second minor range is 29050 to 26407. Its retracement zone at 27729 to 28040 is the second potential upside target.


Short-Term Outlook

If the upside momentum created by the confirmation of the closing price reversal continues on Monday then look for a move into the first minor retracement zone at 27329 to 27547.

Trader reaction to 27329 to 27547 will set the near-term tone. Since the main trend is down, sellers are likely to come in on a test of this area.

Aggressive counter-trend buyers are going to try to take out 27547. This could lead to further upside action. The first buy/sell pattern will repeat on a test of 27729 to 28040 until a change in trend takes place or enough sellers come in to resume the downtrend.

Side Notes

Basically, the buying has to be strong enough to break the lower-top, lower-bottom chart pattern in order to create enough upside momentum to change the trend to up.

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