E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Trader Reaction to 26838 Will Determine Today’s Direction

December E-mini Dow Jones Industrial Average futures are trading flat early Thursday after posting a higher close the previous session. Yesterday’s intraday reversal caught many traders by surprise because it developed after a pair of bearish earnings reports from Caterpillar and Boeing failed to drive the Dow sharply lower.

The price action suggests traders were expecting the weak earnings news and the lack of progress over Brexit to drive prices lower, however, when aggressive sellers failed to show up, the market quickly reversed to the upside, triggering an intraday short-covering rally.

At 06:23 GMT, December E-mini Dow Jones Industrial Average futures are trading 26805, up 3 or +0.01%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum is trending lower. A trade through 27088 will signal a resumption of the uptrend. A move through 26588 will indicate the selling pressure is getting stronger.

The minor trend is down. This is controlling the downside momentum. A trade through 26904 will change the minor trend to up. This will shift momentum to the upside.

The minor range is 27088 to 26588. Its 50% level or pivot at 26838 is acting like resistance.

The major range is 27375 to 25014. Its retracement zone at 26473 to 26195 is major support.

The short-term 50% level support is 26396. The intermediate retracement zone support is 26278 to 26034.

Daily Swing Chart Technical Forecast

Based on the early price action and the current price at 26805, the direction of the December E-mini Dow Jones Industrial Average on Thursday is likely to be determined by trader reaction to the pivot at 26838.

Bullish Scenario

A sustained move over 26838 will indicate the presence of buyers. Taking out 26904 will change the minor trend to up. This could trigger an acceleration to the upside with the next target the main top at 27088.

Bearish Scenario

A sustained move under 26838 will signal the presence of sellers. If this move creates enough downside momentum then look for a retest of yesterday’s low at 26588. If this level fails then look for the selling to possibly extend into the main Fibonacci level at 26473, followed by the short-term 50% level at 26396.