E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Strong Over 28040, Weak Under 28025

December E-mini Dow Jones Industrial Average futures are inching higher early Tuesday after posting a steep decline the previous session. The move represents disappointment in Washington lawmakers’ inability to reach an agreement on coronavirus stimulus ahead of a Tuesday deadline that would make a relief package possible ahead of the November 3 elections.

At 05:33 GMT, December E-mini Dow Jones Industrial Average futures are trading 28134, up 34 or -0.12%.

Pelosi and Treasury secretary Steven Mnuchin “continued to narrow their differences” in conversations on Monday and Pelosi was hopeful that by the end of Tuesday there will be “clarity” on whether coronavirus stimulus is possible before November 3 election, according to a spokesperson for Pelosi.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 28846 will signal a resumption of the uptrend. The main trend will change to down on a move through 26407. This is highly unlikely but there is room for a normal 50% to 61.8% retracement of its current short-term rally.

The minor trend is also up. A trade through 28025 will change the minor trend to down. This will also shift momentum to the downside.

The new minor range is 28846 to 28025. Its 50% level or pivot at 28436 is potential resistance.

The intermediate range is 29050 to 26407. Its retracement zone at 28040 to 27729 is the next potential target zone. This area is actually controlling the near-term direction of the Dow.

The short-term range is 26407 to 28846. Its retracement zone at 27627 to 27339 is another potential downside target and possible support zone.

Short-Term Outlook

Based on Monday’s price action, the direction of the December E-mini Dow Jones Industrial Average futures contract on Tuesday is likely to be determined by trader reaction to the Fibonacci level at 28040.

Bullish Scenario

A sustained move over 28040 will indicate the presence of buyers. This could create the upside momentum needed to challenge the minor pivot at 28436. This level is a potential trigger point for an acceleration into 28732 to 28846.

Bearish Scenario

A sustained move under 28040 will signal the presence of sellers. This should lead to a quick test of the minor bottom at 28025. This price is a potential trigger point for an acceleration into a pair of 50% levels at 27729 and 27627.

Since the main trend is up, buyers could come in on a test of 27729 – 27627. If the latter fails as support then look for the selling to possibly extend into 27339.