E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Reaction to 34383-34619 Sets Weds. Tone

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December E-mini Dow Jones Industrial Average futures are trading higher late in the session on Tuesday after the major cash market averages rebounded following a technology-centered market rout in the previous session.

All three of the major averages are still down for the week after closing off their highs; however, the Dow made back nearly all of Monday’s losses.

At 20:14 GMT, December E-mini Dow Jones Industrial Average futures are trading 34218, up 348 or +1.03%.

Mega-cap technology names and Dow components Apple and Alphabet rose 1.4% and 1.8% respectively. Energy stock Chevron rose 1.1% as oil prices jumped. Financial sector stock Goldman Sachs gained 3.1%.

Daily December E-mini Dow Jones Industrial Average

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. However, momentum is trend higher.

A trade through 34934 will change the main trend to up.

Momentum shifted to the upside on Tuesday when buyers confirmed yesterday’s closing price reversal bottom. A trade through 33383 will negate the chart pattern and trigger a resumption of the downtrend.

The main range is 32835 to 35429. The E-mini Dow is in a position to close on the bullish side of its retracement zone at 34132 to 33826. This zone is new support.

The short-term range is 35383 to 33383. Its retracement zone at 34383 to 34619 is the next upside target and also the last potential resistance before the 34934 main top.

Daily Swing Chart Technical Forecast

The direction of the December E-mini Dow early Wednesday will be determined by trader reaction to 34132.

Bullish Scenario

A sustained move over 34132 will indicate the presence of buyers. If this move creates enough upside momentum then look for a test of 34383.

Sellers could come in on the first test of 34383. Overtaking this level, however, could trigger an acceleration to the upside with 34619 the next likely upside target. Look for sellers again.

Crossing to the strong side of 34619.00 will indicate the buying is getting stronger. This could trigger an acceleration to the upside with 34934 the next potential upside target.

Bearish Scenario

A sustained move under 34132 will signal the presence of sellers. This could trigger a retest of 33826. Counter-trend traders could try to build a support base inside this zone.

If 33826 fails to hold then look for a possible acceleration into the closing price reversal bottom at 33383.

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This article was originally posted on FX Empire