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E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Strengthens Over 26508, Weakens Under 26390

By:
James Hyerczyk
Updated: Oct 7, 2019, 14:41 UTC

Based on the early price action and the current price at 26425, the direction of the December E-mini Dow Jones Industrial Average the rest of the session on Monday is likely to be determined by trader reaction to the 50% level at 26508.

E-mini Dow Jones Industrial Aveage Up

Uncertainty ahead of the start of U.S.-China trade talks on October 10-11 is weighing on December E-mini Dow Jones Industrial Average futures shortly after the cash market opening. Volume is low early in the session as most of the major players are on the sidelines ahead of the meeting between the two economic powerhouses.

At 13:50 GMT, December E-mini Dow Jones Industrial Average futures are trading 26425, down 100 or -0.38%.

Daily Technical Analysis

The main trend is down according to the daily swing chart, however, momentum has been trading higher since the formation of the closing price reversal bottom at 25703 on October 3 and the subsequent confirmation.

A trade through 27312 will change the main trend to up. A move through 25703 will negate the closing price reversal bottom and signal a resumption of the downtrend.

A closing price reversal bottom typically trigger a minimum 2 to 3 day counter-trend rally, often equal to 50% to 61.8% of the last break. We’ve already hit the objective zone so we could see a short-term pullback.

The short-term range is 27312 to 25703. Its retracement zone at 26508 to 26697 is acting like resistance. Trader reaction to this zone could determine the near-term direction of the Dow.

The main range is 25014 to 27312. Its retracement zone at 26163 to 25892 is potential support. This was tested last week.

E-mini Dow Jones Industrial Average
Daily December E-mini Dow Jones Industrial Average

Daily Technical Forecast

Based on the early price action and the current price at 26425, the direction of the December E-mini Dow Jones Industrial Average the rest of the session on Monday is likely to be determined by trader reaction to the 50% level at 26508.

Bullish Scenario

A sustained move over 26508 will indicate the presence of buyers. Taking out Friday’s high at 26549 will indicate the buying is getting stronger. This could trigger a further rally into the short-term Fibonacci level at 26697, followed by the downtrending Gann angle at 26800.

Bearish Scenario

A sustained move under 26508 will signal the presence of sellers. The first target is an uptrending Gann angle at 26390. If this fails then look for a break into the downtrending Gann angle at 26288.

Crossing to the weak side of the angle at 26288 will put the Dow in a bearish position with the next target the main 50% level at 26163.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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