E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Reaction to 29164 Sets Short-Term Tone

December E-mini Dow Jones Industrial Average futures are trading marginally higher into the close on Wednesday after posting a relatively low-volume trade during the regular session. Although the market took out yesterday’s high, it remained inside Monday’s wide range, suggesting investor indecision and impending volatility.

At 21:36 GMT, December E-mini Dow Jones Industrial Average futures are trading 29369, up 50 or +0.17%.

Helping to cap gains was Disney, which dropped more than 3% to lead the Dow lower. JPMorgan Chase traded more than 1% lower. Underpinning the blue-chip average were Apple and Microsoft, which climbed 2.7%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 30000 will signal a resumption of the uptrend. The main trend will change to down on a move through 25953. Due to the prolonged move up in terms of price and time, the Dow remains vulnerable to a potentially bearish closing price reversal top.

The minor range is 30000 to 28328. Its 50% level at 29164 is controlling the direction of the market on Wednesday.

The short-term range is 25953 to 30000. Its retracement zone at 27977 to 27499 is the primary downside target. Since the main trend is up, buyers are likely to come in on a test of this area.

Short-Term Outlook

The range for the week was set on Monday. It’s 28328 to 30000. The mid-point of this range is 29164. The price action the past two days suggests the direction of the market the rest of the week will be determined by trader reaction to 29164.

Bullish Scenario

A sustained move over 29164 will indicate the presence of buyers. If this creates enough upside momentum then look for the rally to possibly extend into this week’s high at 30000. This is both resistance and a possible trigger point for an acceleration to the upside.

Bearish Scenario

A sustained move under 29164 will signal the presence of sellers. This could lead to a sharp break with the first target this week’s low at 28328, followed by the retracement zone support at 27977 to 27499.

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