E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Reaction to 27729 – 28040 Sets the Tone

December E-mini Dow Jones Industrial Average futures are trading higher as we near the end of the session, but the price action has been disappointing since its early session surge. The Dow jumped shortly after the opening, but has since gone into a churn.

The Dow is see-sawing into the close as investors juggle optimism over progress on stimulus talks in Washington with signs of waning momentum of economic recovery from the pandemic recession, now entering its ninth month.

At 19:06 GMT, December E-mini Dow Jones Industrial Average futures are trading 27709, up 45 or +0.16%.

U.S. House Speaker Nancy Pelosi cautioned that Democrats and the White House remained locked in a debate over dollars and values, but expressed optimism that a deal could be reached.  At the same time, a spate of data, including jobless claims and consumer spending, suggested that the plodding economic recovery could be losing steam.

Daily Swing Chart Technical Analysis

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

A trade through 28251 will change the main trend to up. A move through 26407 will signal a resumption of the downtrend.

The minor trend is up. A trade through 27039 will change the minor trend to down. This will also shift momentum to the downside.

The short-term range is 29050 to 26407. Its retracement zone at 27729 to 28040 is the primary upside target. This zone stopped the buying at 27962 earlier in the session.

The minor range is 26407 to 27962. Its retracement zone at 27185 to 27001 is the primary downside target.

Short-Term Outlook

Based on Thursday’s trade, the near-term direction will be determined by trader reaction to 27729 to 28040. At this time, it just looks like we’re going through a rally in a weak market.

The balance point is 27729. Holding over this level will indicate the presence of buyers. The next target is the Fibonacci level at 28040, followed by the main top at 28251. The trend changes to up if this price is taken out.

A sustained move under 27729 will signal the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into the minor retracement zone at 27185 to 27001.

Basically, bullish on a sustained move over 28040, bearish on a sustained move under 27729.