E-Mini Dow Confirms Monday’s Closing Price Reversal Bottom

March E-mini Dow Jones Industrial Average futures are trading slightly better late Tuesday after making another spectacular recovery from an early session steep break.

American Express was the top gainer on the Dow after an earnings beat, adding 8.5%. Dow members IBM and Johnson & Johnson were also among the top gainers on the index after reporting quarterly results.

At 19:41 GMT, March E-mini Dow Jones Industrial Average futures are trading 34298, up 45 or +0.13%.

The fourth-quarter earnings season has started off on a mixed note, with all eyes now on mega-cap growth company Microsoft’s earnings after the market close on Tuesday. Apple reports later in the week.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 36390 will change the main trend to up.

On Monday, the E-mini Dow formed a potentially bullish closing price reversal bottom. A trade through 34410 will confirm the chart pattern. This could trigger the start of a 2 to 3 day counter-trend rally. A move through 33031 will negate the chart pattern and signal a resumption of the downtrend.

The main range is 30089 to 36832. The E-mini Dow is currently trading on the strong side of its retracement zone at 33461 to 32665, making it support. On Monday, this zone stopped the selling at 33031.

The first minor range is 36390 to 33031. Its retracement zone at 34711 to 35107 is the first upside target. The second minor range is 36832 to 33031. Its retracement zone at 34932 to 35380 is the second target. The two zones combine to form a resistance zone at 34932 to 35107. Sellers could come in on the first test of this area.

Daily Swing Chart Technical Forecast

The direction of the March E-mini Dow into the close on Tuesday is likely to be determined by trader reaction to 33031.

Bullish Scenario

A sustained move over 33031 will indicate the presence of buyers. Taking out 34410 will confirm the closing price reversal bottom. This could trigger a late session surge into 34711, followed by 34932 and 35107.

Bearish Scenario

A sustained move under 33031 will signal the presence of sellers. This could lead to a retest of 33461, followed by 33031 then the support cluster at 32699 – 32665.