The December E-mini Dow Jones industrial Average futures contract is trading higher shortly before the cash market opening. The market is trading higher after a dramatic reversal in the Euro which traded down to a 20-month low earlier in the session. Also helping to boost the market are comments from New York Federal Reserve President William Dudley, who said he favors gradual rate hikes if the U.S. economy stays on track. Later today, traders will get the opportunity to react to the ISM Non-Manufacturing Index.
Buyers are also returning after several days of sideways trading last week, related to concerns over the Italian Referendum. Italian Prime Minister Matteo Renzi is now expected to resign given the outcome of the referendum.
There’s not a lot to say about this market because of the unusual chart pattern. The main trend is up according to the daily swing chart. The uptrend resumed after two days of sideways action on the trade through 19215. A new minor bottom at 19083 was formed on the move through the high.
The new short-term range is 18756 to 19276. Its retracement zone at 19016 to 18955 is new support.
There are no significant Gann angles in the area.
The new contract high has put the market in the window of time for a closing price reversal top. That’s not resistance, but a chart pattern. There is no true resistance, however, if that chart pattern does form then look for the start of a 2 to 3 week break.
Today will be all about momentum and the dramatic shift in momentum and investor sentiment earlier today. The best way to stop the momentum is with closing price reversal top.