E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Trend Changes to Down if 26900 Fails to Hold

December E-mini Dow Jones Industrial Average futures are in a position to close lower on Friday and for the week after sentiment shifted to the downside late Friday after the low-level Chinese trade delegation abruptly cancelled a farm visit, called off preliminary negotiations, boarded a plane and went home. Optimistic investors were obviously disappointed by the news. They had hoped this meeting would lay the groundwork for next month’s higher-level negotiations.

At 19:38 GMT, December E-mini Dow Jones Industrial Average futures are trading 26967, down 111 or -0.40%.

Helping to pressure the Dow were weaker components including Caterpillar, which is off 1%, Boeing which is down 1.3% and Apple, which is lower by more than 1%.

Daily Technical Analysis

The main trend is up according to the daily swing chart. A trade through 26900 will change the main trend to down. A trade through 27312 will signal a resumption of the uptrend.

The minor range is 26706 to 27312. Its 50% level or pivot at 27009 is controlling the direction of the Dow on Friday.

The major downside target zone is 26473 to 26195.

Daily Technical Forecast

Based on the early price action and the current price at 26967, the direction of the December E-mini Dow Jones Industrial Average futures contract into the close on Friday will be determined by trader reaction to 27009.

Bearish Scenario

A sustained move under 27009 will indicate the presence of sellers. Crossing to the weak side of a downtrending Gann angle at 26999 will indicate the selling is getting stronger. This could lead to a test of the main bottom at 26900.

Taking out 26900 will change the main trend to down. This could also trigger an acceleration to the downside with the next targets a minor bottom at 26706 and a downtrending Gann angle at 26999. If 26999 fails then look for the selling to possibly extend into the major Fibonacci level at 26473.

Bullish Scenario

Regaining 27009 and sustaining the move could trigger a rally into the close. This could trigger an acceleration to the upside with the next target angle coming in at 27187. This is the last potential resistance angle before the minor top at 27262 and a series of main tops at 27312, 27338 and 27375.