E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Weak Under 29164; Near-Term Target 27977
December E-mini Dow Jones Industrial Average futures are trading lower shortly after the mid-session as an increasing number of U.S. coronavirus cases raised concerns over the health of the economy heading into year-end.
The blue-chip average hit its low of the day after Federal Reserve Chairman Jerome Powell said the U.S. economic outlook remained uncertain even after positive vaccine new from earlier this week.
At 18:39 GMT, December E-mini Dow Jones Industrial Average futures are at 28931, down 380 or -1.30%.
“From our standpoint, it’s just too soon to assess with any confidence the implications of the news for the path of the economy, especially in the near term,” Powell said regarding the vaccine. “With the virus spreading, the next few months could be challenging.”
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. A trade through 30000 will signal a resumption of the uptrend. The main trend changes to down on a move through the last swing bottom at 25953.
The minor range is the week’s range at 28328 to 30000. Its 50% level or pivot at 29164 is controlling the direction of the Dow today.
The short-term range is 25953 to 30000. Its retracement zone at 27977 to 27499 is the first downside target. Since the main trend is up, buyers could come in on a test of this area.
The early price action on Thursday indicates that 29164 is controlling the direction of the Dow. It also suggests that investors aren’t comfortable with chasing the market higher and may prefer to buy after a test of a value area.
A sustained move under 29164 will indicate the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into Monday’s low at 28328, followed by a 50% level at 27977.
Overcoming and sustaining a rally over 29164 will signal the return of buyers. This could eventually lead to a test of the all-time high at 30000.