E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Setting Up for Weekly Reveral Top
December E-mini Dow Jones Industrial Average futures moved lower on Wednesday as the momentum from a strong earnings season started to fade. The blue chip average fell for the first time in four days, dragged down by Visa. Some of its loss was offset by a jump in Microsoft.
Visa’s stock slipped 6.9% after the company issued a revenue outlook that some analysts considered conservative. Microsoft shares jumped 4.2% after the tech company reported earnings that exceeded analysts’ estimates and the fastest revenue growth since 2018.
At 20:57 GMT, December E-mini Dow Jones Industrial Average futures are trading 35423, down 221 or -0.62%.
In addition to the intraday sell-off, the E-mini Dow made a new low and is now trading lower for the week, putting it in a position to form a potentially bearish closing price reversal top that could signal the start of a significant sell-off.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. A trade through 35777 will signal a resumption of the uptrend. A move through 33984 will change the main trend to down. This is highly unlikely, but the daily chart indicates there is plenty of room to the downside for a steep sell-off.
The minor range is 33984 to 35777. Its retracement zone at 34881 to 34669 is the first downside target.
The short-term range is 33383 to 35777. Its retracement zone at 34580 to 34298 is the second downside target.
The combination of the two retracement zones makes 34669 to 34580 the best downside target area.
The direction of the December E-mini Dow Jones Industrial Average on Thursday is likely to be determined by trader reaction to last week’s close at 35557.
A sustained move over 35557 will indicate the presence of buyers. If this is able to generate enough upside momentum then we could see a retest of the record high at 35777.
A sustained move under 35557 will signal the presence of sellers. Crossing back under the former main top at 35429 will be another sign of increasing selling pressure.
If the selling pressure continues to increase then we could see an acceleration to the downside with 34881 the first downside target, followed by 34669 – 34580.