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James Hyerczyk
E-mini Dow Jones Industrial Average

December E-mini Dow Jones Industrial Average futures are trading lower on Thursday, but inside yesterday’s range. The price action suggests investor indecision and impending volatility. The lack of movement is being fueled by investor confusion over the latest trade talk developments.

Yesterday, the headlines were saying the U.S. and China are at an impasse and that a trade deal could be postponed until early next year. Shortly before the opening, The Wall Street Journal was reporting that Chinese Vice Premier Liu He invited U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin to Beijing to sit down for further negotiations.

At 16:37 GMT, December E-mini Dow Jones Industrial Average futures are at 27703, down 97 or -0.35%.

Uncertainty can encourage investors to sell. So the longer this confusion lingers, the greater the changes of a near-term correction.

Daily December E-mini Dow Jones Industrial Average

Daily Technical Analysis

The main trend is up according to the daily swing chart. However, momentum has been trending lower since the formation of the closing price reversal top on November 19 at 28128.

A trade through 28128 will negate the closing price reversal top and signal a resumption of the uptrend. The main trend will officially turn to down on a move through the last main bottom at 26588.

The minor trend is also up. A trade through 27337 will change the minor trend to down. This will confirm the shift in momentum.

The first minor range is 27337 to 28128. Its 50% level or pivot at 27733 is currently being straddled, creating a sideways trade.

The second minor range is 26847 to 28128. Its 50% level comes in at 27488. It’s potential support.

The main range is 26588 to 28128. If the minor pivots fail then look for the selling to possibly extend into its retracement zone at 27358 to 27176. This is a value zone so watch for buyers.


Daily Technical Forecast

Based on the early price action and the current price at 27703, the direction of the December E-mini Dow Jones Industrial Average the rest of the session on Thursday is likely to be determined by trader reaction to the first pivot at 27333.

Bullish Scenario

A sustained move over 27333 will indicate the presence of buyers. The first target is a steep downtrending Gann angle at 27872.

Overtaking 27872 will indicate the buying is getting stronger. This could trigger a rally into a long-term uptrending Gann angle at 27943. The rest of the rally is likely to be labored because of downtrending Gann angles at 28000, 28064 and 28096. The latter is the last potential resistance angle before the 28128 main top.

Bearish Scenario

A sustained move under 27733 will signal the presence of sellers. This could trigger an acceleration to the downside with the next target the second pivot at 27488.

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