E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Needs to Hold 27538 Pivot to Sustain Rally

December E-mini Dow Jones Industrial Average futures closed slightly higher after rebounding from early session weakness. However, the futures contract did diverge from it cash counterpart, which hit a new all-time high on Monday.

The Dow was under pressure from the start as traders reacted to comments made by President Trump on Friday about the progress of the U.S.-China trade talks. Trump said he had not agreed to roll back tariffs on China. Those comments came after the Chinese commerce ministry said that both sides had agreed to roll back the tariffs in tranches. This news helped spike the Dow to a record high on November 7.

On Monday, December E-mini Dow Jones Industrial Average futures settled at 27658, up 27 or +0.10%.

Helping to fuel the rally in the Dow was a sharp rise from component Boeing. Shares of Boeing jumped on news it will resume deliveries of the beleaguered 737 Max jet next month. The stock was up more than 4.5% on the news.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 27739 will signal a resumption of the uptrend. The main trend will change to down on a trade through 26588. This is highly unlikely, but due to the prolonged move up in terms of price and time, Tuesday’s session will begin with the market inside the window of time for a closing price reversal top.

The minor trend is also up. A trade through 27337 will change the minor trend to down. This will also shift momentum to the downside.

The first minor range is 27337 to 27739. Its 50% level or pivot at 27538 is controlling the short-term direction of the Dow.

The next minor range is 26847 to 27739. Its pivot at 27293 is the next potential support level.

The main range is 26588 to 27739. Its 50% retracement level at 27164 is the strongest near-term support.

Daily Swing Chart Technical Forecast

Based on Monday’s price action and the close at 27658, the direction of the December E-mini Dow Jones Industrial Average on Tuesday is likely to be determined by trader reaction to the 50% level at 27538.

Bullish Scenario

A sustained move over 27538 will signal the presence of buyers. If this move creates enough upside momentum then look for the rally to possibly extend into the contract high at 27739. This is a potential trigger point for an acceleration to the upside.

Bearish Scenario

A sustained move under 27538 will indicate the presence of sellers. If this move generates enough downside momentum then look for a potential break into the minor bottom at 27337, followed by the pivot at 27293. Watch for a technical bounce on the first test of this area.