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E-mini Dow Buyers Trying to Form Secondary Higher Bottom

By:
James Hyerczyk
Published: Jan 27, 2022, 19:53 UTC

The main trend is down according to the daily swing chart, however, momentum has been trending higher since Monday’s closing price reversal bottom.

E-mini Dow Jones Industrial Average

In this article:

March E-mini Dow Jones Industrial Average futures are trading lower late in the session after giving back earlier gains on Thursday. The blue chip average rose on the cash market opening in reaction to a better-than-expected fourth-quarter GDP report, but worries about the Federal Reserve’s rate hike continued to weigh on sentiment.

At 19:37 GMT, March E-mini Dow Jones Industrial Average futures are trading 33979, down 76 or -0.22%. This is down from an intraday high of 34658.

Fourth-quarter gross domestic product jumped 6.9% from the year prior, the Commerce Department reported Thursday. Economists surveyed by Dow Jones expected the economy grew at a 5.5% annualized pace in the final three months of 2021.

Fed Chairman Jerome Powell rattled markets Wednesday saying the central bank has “quite a bit of room” to raise rates before negatively impacting employment.

Daily March E-mini Dow Jones Industrial Average

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, however, momentum has been trending higher since Monday’s closing price reversal bottom.

A trade through 33031 will negate the chart pattern and signal a resumption of the downtrend. A move through 36390 will change the main trend to up.

The minor trend is also down. A trade through 34699 will change the minor trend up. This will confirm the shift in momentum.

The minor range is 33031 to 34699. Its retracement zone at 33865 to 33668 is support. It was tested earlier today.

The major support is the long-term retracement zone at 33461 to 32665. This zone stopped the selling at 33031 on January 24.

On the upside, the first minor retracement zone resistance is 34711 to 35107. The second minor retracement zone resistance is 34932 to 35380.

The two retracement zones combine to form a key resistance cluster at 34932 to 35107.

Short-Term Outlook

Aggressive counter-trend buyers may try to build a secondary higher bottom at 33865 to 33461. Trend traders may try to form a secondary lower top on a rally into 34711 to 35380. This suggests a potential sideways trade over the near-term until the market can break out of the range in either direction.

For a look at all of today’s economic events, check out our economic calendar.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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