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James Hyerczyk
E-mini Dow Jones Industrial Average

December E-mini Dow Jones Industrial Average futures are steady shortly after the cash market opening. A divergence between the cash and futures markets are helping to hold prices in a tight range. Stock futures sold off sharply on Wednesday after the cash market closed, creating the divergence. Traders are also reluctant to take a position ahead of a key economic release at 14:00 GMT that could set the tone of the session.

At 13:42 GMT, December E-mini Dow Jones Industrial Average futures are trading 25998, up 13 or +0.05%.

Look for volatility at 14:00 GMT following the release of the ISM Non-Manufacturing PMI report. It’s expected to come in at 55.1, down from the previously reported 56.4. Earlier in the week, a weaker-than-expected ISM Manufacturing PMI report for September came in well-below expectations, contributing to this week’s steep sell-off.

Daily December E-mini Dow Jones Industrial Average

Daily Technical Analysis

The main trend is down according to the daily swing chart. The market is not in a position to change the main trend to up, but due to the prolonged move down in terms of price and time, it is ripe for a closing price reversal bottom.

If formed then confirmed, a closing price reversal bottom could trigger a 2 to 3 day counter-trend rally.

The main range is 25014 to 27312. Its retracement zone at 26163 to 25892 is currently being tested.

The short-term range is 25244 to 27312. Its retracement zone is 26278 to 26034.

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Daily Technical Forecast

Based on the early price action and the current price at 25998, the direction of the December E-mini Dow Jones Industrial Average futures contract the rest of the session on Thursday is likely to be determined by trader reaction to the short-term Fibonacci level at 26034.

Bearish Scenario

A sustained move under 26034 will indicate the presence of sellers. This could trigger a break into the main Fibonacci level at 25892.

If 25892 fails then look for the selling to extend into the uptrending Gann angle at 25670. This is a potential trigger point for an acceleration to the downside with the next target angle coming in at 25342.

Bullish Scenario

A sustained move over 26034 will signal the return of buyers. This could trigger a labored rally with resistance lined up at 26163, 26278, 26326 and a downtrending Gann angle at 26416.

The Gann angle at 26416 has guided the market lower since the 27312 main top on September 13.

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