E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Strong Over 35704, Weak Under 35637

December E-mini Dow Jones Industrial Average futures are edging higher at the mid-session on Monday after giving back most of its earlier gains following another record high. Several factors are contributing to the developing weakness including position-squaring ahead of the Federal Reserve’s two-day meeting, data that showed U.S. manufacturing activity slowed in October amid supply chain disruptions and a drop by Dow component Microsoft.

At 16:22 GMT, December E-mini Dow Jones Industrial Average futures are trading 35762, up 58 or +0.16%. This is down from an intraday high of 35891.

The Fed holds its policy meeting on November 2-3. Policymakers are expected to announce the tapering of its $120 billion monthly bond buying program amid rising price pressures.

In economic news, the Institute for Supply Management (ISM) said its index of national factory activity slipped to a reading of 60.8 last month, as a measure of new orders dropped to a 16-month low and factories continued to experience delays with deliveries of raw materials.

In stock related news, mega-cap technology stocks Microsoft and Apple are down 0.92% and 0.64% respectively.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through the intraday high at 35891 will signal a resumption of the uptrend. A move through 33984 will change the main trend to down.

The minor trend is also up. A trade through 35383 will change the minor trend to down. This will shift momentum to the downside.

The minor range is 35383 to 35891. Its 50% level or pivot at 35637 is the nearest support.

The short-term range is 33984 to 35891. If the minor trend changes to down then look for the selling to possibly extend into its retracement zone at 34938 to 34712.

The main range is 33383 to 35891. Its retracement zone at 34637 to 34341 is controlling the near-term direction of the E-mini Dow. It is a value zone.

Daily Swing Chart Technical Forecast

The direction of the December E-mini Dow into the close is likely to be determined by trader reaction to 35704.

Bullish Scenario

A sustained move over 35704 will indicate the presence of buyers. If this move creates enough upside momentum late in the session then look for buyers to take a run at the intraday high at 35891.

Bearish Scenario

A sustained move under 35704 will signal the presence of sellers. The first downside target is the pivot at 35637.

Buyers could come in on the first test of 35637. If it fails, we could see a short-term break into the minor bottom at 35383.

A close under 35704 will form a closing price reversal top. If confirmed, this could trigger the start of a 2 to 3 day correction.