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E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Downside Momentum Could Drive Dow into 26473

James Hyerczyk

December E-mini Dow Jones Industrial Average futures are trading lower at the mid-session. Optimism over U.S.-China trade relations helped drive the Dow higher earlier in the session after Bloomberg News reported China granted new waivers to several companies exempting them from tariffs on at least 2 million tons of U.S. soybeans. The report added some companies have already bought about 1.2 million tons of soybeans.

At 16:13 GMT, December E-mini Dow Jones Industrial Average futures are trading 26918, down 45 or -0.17%.

The Dow started to retreat shortly after the opening after a report showed consumer confidence for September slipped to 125.1 from 135.1 in August. Economists were looking for a reading of 133.5.

The overall price action suggests that investors re reluctant to buy strength, which could mean the market is setting up for a correction into a value zone.

Daily December E-mini Dow Jones Industrial Average

Daily Technical Analysis

The main trend is down according to the daily swing chart. A trade through 26803 will reaffirm the downtrend. A move through 27262 will change the main trend to up.

The minor range is 27312 to 26803. Its 50% level or pivot at 27050 is resistance.

The main range is 27375 to 25014. Its retracement zone at 26473 to 26195 is the primary downside target. This zone is controlling the longer-term direction of the Dow.

The short-term range is 25244 to 27312. Its retracement zone at 26278 to 26034 is another downside target.

Coming the two retracement zones creates a key target zone at 26278 to 26195.

Daily December E-mini Dow Jones Industrial Average

Daily Technical Forecast

Based on the early price action and the current price at 26918, the direction of the December E-mini Dow Jones Industrial Average the rest of the session on Tuesday is likely to be determined by trader reaction to the downtrending Gann angle at 26933.

Bearish Scenario

A sustained move under 26933 will indicate the presence of sellers. Taking out 26803 will indicate the selling is getting stronger. This could trigger a break into a downtrending Gann angle at 26591, followed by an uptrending Gann angle at 26524 and the main Fibonacci level at 26473. This is a potential trigger point for an acceleration into the short-term 50% level at 26278.

Bullish Scenario

Holding above yesterday’s low at 26803 will signal that counter-trend buyers are coming in. If this creates enough upside momentum then look for the rally to possibly extend into the downtrending Gann angle at 26983, followed by a minor pivot at 27050 and another downtrending Gann angle at 27179.

This article was originally posted on FX Empire