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E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Testing Major 50% Level at 26163

James Hyerczyk

Eroding optimism on Wall Street over a trade deal between the U.S. and China is pressuring the December E-mini Dow Jones Industrial Average futures contract shortly after the cash market opening on Tuesday. The cash market Dow is also down over 250 points.

Sellers started to hit the Dow during the pre-market session after the South China Morning Post reported China is toning down its expectations ahead of trade negotiations with the United States. Although most investors don’t expect a major announcement following the October 10-11 meeting, some were hoping for a “mini-deal”.

One sticking point is President Trump is looking for a broad deal and China is willing to accept a partial deal. Traders are also saying they expect China to retaliate against the U.S. for blacklisting additional Chinese technology firms.

At 13:50 GMT, December E-mini Dow Jones Industrial Average futures are trading 26170, down 271 or -1.02%.

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 25703 will signal a resumption of the downtrend.

The minor trend is also down. A trade through 26615 will change the minor trend to up. This will also shift momentum to the upside.

The main range is 25014 to 27312. Its retracement zone at 26163 to 25892 is potential support.

The short-term range is 27312 to 25703. Its retracement zone at 26508 to 26697 is resistance. This area stopped the rally at 26615 on Monday.

Daily Technical Forecast

Based on the early price action and the current price at 26170, 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 main 50% level at 26163.

Bullish Scenario

Holding 26163 will indicate the return of buyers. If this move creates enough upside momentum, we could see a retest of the short-term 50% level at 26508, followed by the minor top at 26615, the short-term Fibonacci level at 26697 and the downtrending Gann angle at 26768.

Bearish Scenario

A break under 26163 will indicate the selling is getting stronger. The first target angle comes in at 26087. If this angle fails as support, the selling is likely to extend into another angle at 25895, the main Fibonacci level at 25892, a Gann angle at 25799 and the main bottom at 25703.

Taking out the long-term uptrending Gann angle at 25718 could trigger an acceleration to the downside.

This article was originally posted on FX Empire