E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Testing Key Retracement Zone

December E-mini Dow Jones Industrial Average futures are trading higher during the premarket session after the blue chip average recaptured a 459-point loss from earlier in the day as investor concerns about a debt ceiling deal eased.

At 05:44 GMT, December E-mini Dow Jones Industrial Average futures are at 34390, up 99 or +0.29%.

On Wednesday Senate Minority Leader Mitch McConnell offered a short-term suspension of the U.S. debt ceiling to avert a national default and economic crisis, which economists have warned could be disastrous. On Tuesday Treasury Secretary Janet Yellen warned that the U.S. should “fully expect” a recession if that happens, CNBC reported.

On the data front, initial jobless claims and consumer credit are due out on Thursday.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. However, momentum is trending higher following the confirmation of last Friday’s closing price reversal bottom.

A trade through 34934 will change the main trend to up. A move through 33383 will negate the closing price reversal bottom and signal a resumption of the downtrend.

The main range is 32835 to 35429. The market is currently trading on the strong side of its retracement zone at 34132 to 33826, making it support.

The short-term range is 35383 to 33383. The Dow is currently testing its retracement zone at 34383 to 34619. Trader reaction to this zone will determine the near-term direction of the E-mini Dow.

Daily Swing Chart Technical Forecast

The direction of the December E-mini Dow Jones Industrial Average early Thursday is likely to be determined by trader reaction to 34383.

Bullish Scenario

A sustained move over 34383 will indicate the presence of buyers. If this move creates enough upside momentum then look for a move into 34619. Sellers could come in on the first test of this level. Overtaking it, however, could trigger an acceleration into the main top at 34934. Taking out this level will change the main trend to up.

Bearish Scenario

A sustained move under 34383 will signal the presence of sellers. If this creates enough downside momentum then look for a break into 34132.

Counter-trend buyers could come in on a test of 34132, but if it fails then look for a retest of 33826.