E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Vulerable to Steep Break Under 33826

December E-mini Dow Jones Industrial Average futures continued their sell-off Thursday as inflation fears persisted and expectations grew that the U.S. Federal Reserve will tighten policy in the coming months.

At 19:21 GMT, December E-mini Dow Jones Industrial Average futures are trading 33964, down 301 or -0.88%.

Federal Reserve Chair Jerome Powell said on Wednesday that resolving “tension” between high inflation and still-elevated unemployment is the most urgent issue facing the Fed right now, acknowledging the U.S. central bank’s two goals of stable prices and full employment are in potential conflict.

In addition to the Fed, investors are also expressing concerns over a possible government shutdown, a $1 trillion infrastructure bill and a potential energy crisis.

In stock related news, Dow components Walgreen Boots Alliance and Home Depot fell more than 2%. Shares of Goldman Sachs and JPMorgan were down by more than 1%.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 33478 will signal a resumption of the downtrend. A move through 34934 will change the main trend to up.

The main range is 32835 to 35429. The Dow is currently testing its retracement zone at 34132 to 33826. This zone is controlling the near-term direction of the blue chip average.

The minor range is 33478 to 34934. The Dow is currently trading on the weak side of its retracement zone at 34034 to 34206. This zone is straddling the main 50% level at 34132.

The short-term range is 35383 to 33478. Its retracement zone at 34431 to 34655 is resistance. Today’s high at 34554 fell inside this zone.

Daily Swing Chart Technical Forecast

The direction of the December E-mini Dow into the close on Thursday will be determined by trader reaction to 34034.

Bearish Scenario

A sustained move under 34034 will indicate the presence of sellers. The first downside target is 33826. If this level fails then look for a possible acceleration into the main bottom at 33478.

Bullish Scenario

Overtaking and sustaining a rally over 34034 will signal the presence of late session buying. This could lead to a labored rally into 34132 and 34206.

Taking out 34206 will indicate the buying is getting stronger. This could trigger a late session surge into 34431.