E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Needs to Hold 27741 to Sustain Momentum

December E-mini Dow Jones Industrial Average futures are flat-lining on Friday as traders looked for clarity around the presidential and congressional election results. Contributing to the rangebound trade was a better-than-expected U.S. employment report.

Late Friday, Democratic nominee Joe Biden leads with 253 electoral votes, according to NBC New projections, while President Donald Trump has 214. Victories by Republicans in several key Senate races have lowered the odds of a “blue wave” and the potential for higher taxes and stronger regulations. Additionally, a divided government could make it harder for lawmakers to push through new fiscal stimulus.

At 18:57 GMT, December E-mini Dow Jones Industrial Average futures are trading 28199, down 98 or -0.35%.

American Express and UnitedHealth were the biggest Dow decliners, falling more than 1% each. Energy and financials led the S&P 500 lower, falling 2% and 0.9%, respectively.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. However, momentum is trending higher. The main trend will change to up on a trade through 28846. A move through 29050 will reaffirm the uptrend. A trade through 25953 will signal a resumption of the downtrend.

The minor trend is up. It changed to up when buyers took out the previous minor top at 28392 on Friday. This confirmed the shift in momentum to the upside.

The short-term range is 28846 to 25953. Its retracement zone at 27741 to 27400 is potential support. It’s controlling the near-term direction of the index.

The main retracement zone support is 26714 to 26162. This zone was tested successfully earlier in the week.

Short-Term Outlook

The key to sustaining the current rally is holding the short-term retracement zone at 27741 to 27400.

A break back under 27741 will indicate the buying is slowing. Holding inside 27741 to 27400 will indicate a neutral market. A break under 24700 will signal the presence of sellers. This could trigger a 50% to 61.8% retracement of the current rally from 25953.

On the upside, if the momentum continues then look for buyers to claw through Friday’s high at 28457, another minor top at 28732 before running into possible resistance at 28846 to 29050.

Selling into the first test of an all-time high is normal.