E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Value Buyers Eyeing 34641 -34214

December E-mini Dow Jones Industrial Average futures are down sharply on Friday as a new COVID-19 variant found in South Africa triggered a global shift away from risk assets. At one point, the blue chip average dropped 1000 points, or 2.8%, for its worst day of the year. Friday is a shortened trading day because of the Thanksgiving holiday with U.S. markets closing at 18:00 GMT.

At 16:48 GMT, December E-mini Dow Jones Industrial Average futures are trading 34781, down 968 or -2.71%.

Dow components in the financial sector were hit the hardest with American Express down by 8.9%, JPMorgan Chase off by 4.14% and Goldman Sachs down 3.59%.

Airline stock Boeing also fell sharply, dropping 7.54%. Energy company Chevron Corp was off by 3.23% as crude oil prices plunged.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The next downside target is the main bottom at 33984. A trade through 36238 will change the main trend to up.

The minor trend is also down. A trade through 35900 will change the minor trend to up. This will shift momentum to the upside.

The main range is 32835 to 36446. Its retracement zone at 34641 to 34214 is the primary downside target.

The intermediate range is 33383 to 36446. The market is currently testing its retracement zone at 34915 to 34553.

The combination of these zones create a potential support cluster at 34641 to 34553.

On the upside, potential resistance is a 50% level at 34915 and another 50% level at 35215.

Short-Term Outlook

The volume is extremely low today so we may be looking at an exaggerated sell-off. We won’t know for sure until traders return next week.

In the meantime, buyers may show up on the first test of 34641 to 34553. If successful, this could produce a late session short-covering rally.

If 34553 fails to hold then the selling could possibly extend to the main Fibonacci level at 34214.

We think calmer heads will prevail early next week, which means aggressive buyers may try to get an early jump on the rebound rally on a test of 34641 to 34214.