December E-mini Dow Jones Industrial Average futures were boosted last week by dovish remarks from Fed Chair Jerome Powell and increased bets that the crucial meeting from U.S. President Donald Trump and China’s leader Xi Jinping would lead to a truce over the trade war.
Both moves fueled increased demand for higher risk assets. Powell said that the Fed was getting closer to neutral with its rate hikes and suggested fewer rate hikes in 2019. This helped lift some of the bearishness that had been pressuring the market since early October.
Last week, December E-mini Dow Jones Industrial Average futures settled at 25539, up 1279 or +5.27%.
Weekly Swing Chart Technical Analysis
The main trend is up according the weekly swing chart. However, momentum is trending lower. A trade through 24086 will change the main trend to down. This is followed closely by other bottoms at 24000 and 23580.
A trade through 26268 will shift momentum to the upside while a trade through 26966 will signal a resumption of the uptrend.
The main range is 24000 to 26966. Its retracement zone is 25483 to 25133. Trading on the strong side of this zone is helping to give the Dow an upside bias.
The short-term range is 26966 to 24086. Its retracement zone at 25526 to 25866 is the next target zone. Once this zone is cleared, the market will have a chance to breakout to the upside.
Weekly Swing Chart Technical Forecast
Based on last week’s close at 25539, the direction of the December E-mini Dow Jones Industrial Average futures contract this week is likely to be determined by trader reaction to the main 50% level at 25483.
A sustained move over 25483 will indicate the presence of buyers. If this move generates enough upside momentum then look for the rally to extend into the short-term Fibonacci level at 25866. Overcoming this level could drive the market into the main top at 26268. This is a potential trigger point for an acceleration into the next main top at 26966.
A sustained move under 25483 will signal the presence of sellers. This could lead to a quick test of the Fibonacci level at 25133. This is a potential trigger point for an acceleration to the downside with potential targets lined up at 24246, 24086 and 24000.
25483 is a key pivot, but the true breakout levels are 25866 and 25133.