E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Reaction to 27339 Sets Tone into CloseThe direction of the December Dow Jones Industrial Average into the close is likely to be determined by trader reaction to 27339.
December E-mini Dow Jones Industrial Average futures are trading nearly 800 points lower at the mid-session on Monday after investors threw in the towel on any hopes of a fiscal stimulus deal before the election and as a surge in coronavirus infections threatened to derail the economic recovery.
Optimism dimmed earlier today that the White House and Republicans could strike a stimulus deal with the Democrats before the election. White House chief of staff Mark Meadows and House Speaker Nancy Pelosi in separate interviews accused each other of moving the goalposts on stimulus talks. White House economic advisor Larry Kudlow also told CNBC’s “Squawk Box” that talks had slowed down, but noted they are still ongoing.
Trading Derivatives carries a high level of risk to your capital and you should only trade with money you can afford to lose. Trading Derivatives may not be suitable for all investors, so please ensure that you fully understand the risks involved, and seek independent advice if necessary. A Product Disclosure Statement (PDS) can be obtained either from this website or on request from our offices and should be considered before entering into a transaction with us. Raw Spread accounts offer spreads from 0.0 pips with a commission charge of USD $3.50 per 100k traded. Standard account offer spreads from 1 pips with no additional commission charges. Spreads on CFD indices start at 0.4 points. The information on this site is not directed at residents in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.
At 17:25 GMT, December E-mini Dow Jones Industrial Average futures are trading 27324, down 865 or -3.07%.
In stock news, Oracle and Microsoft are down 4.4% and 2.4%, respectively. However, stocks that are expected to benefit from another shutdown of the economy moved higher. They included Amazon, which climbed 0.4% and Zoom Video, which gained 3.2%.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart, however, momentum is trending lower. The main trend will change to down on a trade through 26407. A move through 28846 will signal a resumption of the uptrend.
The minor trend is down. This is controlling the downside momentum. The minor trend was reaffirmed earlier today when sellers took out the Thursday’s minor bottom at 27896. The next potential minor bottom targets are 27109 and 27039.
The intermediate range is 29050 to 26407. Its retracement zone at 27729 to 28040 is new resistance.
The short-term range is 26407 to 28846. The Dow is currently trading on the weak side of this zone.
Based on the current price at 27324, the direction of the December Dow Jones Industrial Average into the close is likely to be determined by trader reaction to the short-term Fibonacci level at 27339.
A sustained move under 27339 will indicate the presence of sellers. If this creates enough downside momentum then look for the selling to possibly extend into the minor bottoms at 27109 and 27039. If the latter fails then look for the selling to possibly extend into the main 50% level at 26714.
A sustained move over 27339 will signal the presence of buyers or that the selling has slowed down. If this creates enough upside momentum then look for the rally to possibly extend into a pair of 50% levels at 27627 and 27729.