E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Selling Pressure Could Drive Dow into 26855

December E-mini Dow Jones Industrial Average futures are called lower based on the pre-market trade. The market is currently trading inside yesterday’s range, which suggests investor indecision and impending volatility. The price action is not indicative of a change in trend, it merely suggests position-squaring ahead of the start of the U.S. Federal Reserve’s two-day policy meeting.

At 13:20 GMT, the December E-mini Dow Jones Industrial Average is trading 26995, down 58 or -0.21%.

On Wednesday’s the Fed is expected to cut its benchmark interest rate 25-basis points. This has been priced in for weeks. Investors aren’t sure what the Fed will do in December although many economists think they will pass on a cut, but trim again in March.

Underpinning the Dow the past few days has been hope of a partial trade deal between the U.S. and China, and stronger-than-expected earnings.

Daily Technical Analysis

The main trend is up according to the daily swing chart. Unlike the S&P 500 Index and the NASDAQ Composite Index, the Dow is still trading below its all-time high. A trade though yesterday’s high at 27120 will indicate the presence of buyers. This would put the market in a position to challenge three main tops at 27262, 27312 and 27338 (All-Time High).

The nearest main bottom comes in at 26588. A trade through this bottom will change the main trend to down.

The short-term range is 27312 to 25703. Its retracement zone at 26697 to 26508 is potential support. This zone stopped the selling at 26508 on October 23.

Daily Technical Forecast

Based on the early price action and the current price at 26995, the direction of the December E-mini Dow Jones Industrial Average the rest of the session on Monday will be determined by trader reaction to the downtrending Gann angle at 27056.

Bullish Scenario

A sustained move over 27056 will indicate the presence of buyers. The first upside target is yesterday’s high at 27120, this is followed by a downtrending Gann angle at 27184.

The angle at 27184 is the last potential resistance angle before the 27262 main top.

Bearish Scenario

A sustained move under 27056 will signal the presence of sellers. If this move generates enough downside momentum then look for the selling to extend into an uptrending Gann angle at 26855. This angle has been guiding the Dow higher for 18 trading sessions.

Look for a technical bounce on the first test of 26855. If this angle fails as support then look out to the downside.