E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Steep Break Likely if 29164 Fails

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December E-mini Dow Jones Industrial Average futures are trading lower shortly after the mid-session on Thursday, retreating further from its record closing high hit on Monday following positive data on a coronavirus vaccine.

Investors have been trimming positions the last three sessions as worries mount over the economic damage inflicted by tightening business restrictions as COVID-19 cases continue to climb.

At 18:21 GMT, December E-mini Dow Jones Industrial Average futures are trading 29279, down 87 or -0.31%.

In other news, the Labor Department reported initial claims for state unemployment benefits totaled a seasonally adjusted 742,000 for the week ended November 14, compared with 711,000 in the prior week. Economists polled by Reuters had forecast 707,000 applications in the latest week.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 30000 will signal a resumption of the uptrend. The main trend will change to down on a move through 25953. This is highly unlikely but there is room to the downside for a normal 50% to 61.8% correction.

The minor trend is also up. A trade through 28815 will change the minor trend to down. Taking out 28781 will reaffirm the downtrend.

The minor range is 28328 to 30000. Its 50% level or pivot at 29164 should control the direction of the benchmark index into Friday’s close.

The short-term range is 25953 to 30000. If the minor trend changes to down then look for the selling to extend into its retracement zone at 27977 to 27499.

Short-Term Outlook

The price action over the last two weeks suggests the direction of the December E-mini Dow Jones Industrial Average futures contract into Friday’s close will be determined by trader reaction to 29164.

Bullish Scenario

Holding above 29164 will indicate that buyers are coming in to defend the uptrend. If this is able to generate enough upside momentum then look for the rally to possibly lead to a retest of 29998 to 30000.

Bearish Scenario

A sustained move under 29164 will signal the presence of sellers. This could trigger a spike into a pair of minor bottoms at 28815 and 28781. If the latter fails as support then look for the selling to possibly extend into 28328.