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James Hyerczyk
E-mini Dow Jones Industrial Average Up

December E-mini Dow Jones Industrial Average futures reached an all-time high on Monday along with the cash index. The move was primarily driven by optimism surrounding a potential U.S.-China trade deal with an additional assist from strong earnings and an accommodative Federal Reserve. Friday’s strong U.S. jobs report also supported risk appetite for higher-yielding stocks.

At 16:48 GMT, December E-mini Dow Jones Industrial Average futures are trading 27404, up 145 or +0.53%.

Daily December E-mini Dow Jones Industrial Average

Daily Technical Analysis

The main trend is up according to the daily swing chart. The main trend was reaffirmed earlier today when buyers took out three main tops at 27312, 27338 and 27375. Holding above these levels will indicate the buying is getting stronger. Falling back below these level will indicate the buying is getting weaker, but not necessarily the presence of sellers.

The main trend will change to down on a trade through 26588. This is highly unlikely today, however, due to the prolonged move down in terms of price and time, the Dow is in the window of time to form a potentially bearish closing price reversal top.

The minor trend is also up. A trade through 26847 will change the minor trend to down. This will also shift momentum to the downside.

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Daily Technical Forecast

Based on the early price action and the current price at 27404, the direction of the December E-mini Dow Jones Industrial Average futures contract the rest of the session on Monday is likely to be determined by trader reaction to Friday’s close at 27259.

Bullish Scenario

A sustained move over 27259 will indicate the buying is getting stronger. There is no upside target at this time.

Bearish Scenario

A sustained move under 27259 will signal the selling is greater than the buying at current price levels. This will also put the Dow in a position to post a potentially bearish closing price reversal top.

The first potential downside target is a steep uptrending Gann angle at 27111. This angle, moving up at a rate of 64 points per day, has been guiding the Dow higher since the main bottom at 25703 on October 3.

Taking out 25703 could trigger a steep break into the minor bottom at 26847.

Side Notes

A close under 27259 will form a closing price reversal top. If confirmed, this could lead to the start of a minimum 2 to 3 day correction.

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