E-mini Dow Holding Strong Side of Long-Term 50% Level

March E-mini Dow Jones Industrial Average futures are trading lower early Monday, but inside the previous session’s range, indicating investor indecision and impending volatility.

The blue chip average soared on Friday after a volatile week following Russia’s invasion of Ukraine, but futures are falling in overnight trading after the U.S. and its allies announced new sanctions and measures against Russia, such as removing selected Russian banks from the interbank messaging system, SWIFT.

At 07:33 GMT, March E-mini Dow Jones Industrial Average futures are trading 33554, down 440 or -1.29%.

In other news, Russian President Vladimir Putin on Sunday put his country’s deterrence forces, which reportedly include nuclear capabilities, on high alert in response to international backlash to Russia’s invasion.

Meanwhile, on the diplomatic front, representatives from the Ukraine and Russian governments have agreed to meet at the Ukraine-Belarus border with “no preconditions,” according to Ukraine’s Defense Ministry. Belarus, which shares a border with both Ukraine and Russia, has close ties with Moscow.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. However, momentum has been trending higher since the formation of a potentially bullish closing price reversal bottom on February 24.

A trade through 35060 will change the main trend to up. A move through 32167 will negate the closing price reversal bottom 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.

The minor range is 35752 to 32167. Its 50% level at 33960 is the first upside target. It stopped the rally on Friday.

The short-term range is 36832 to 32167. Its retracement zone at 34500 to 35050 is the major resistance.

Daily Swing Chart Technical Forecast

The direction of the March E-mini Dow early Monday is likely to be determined by trader reaction to the main 50% level at 33461.

Bullish Scenario

A sustained move over 33461 will indicate the presence of buyers. If this move creates enough upside momentum then look for a surge into the minor pivot at 33960. Overtaking this level and Friday’s high at 34034 will indicate the buying is getting stronger. This could trigger a further rally into the short-term retracement zone at 34500 to 35050 where the market is likely to run into new sellers.

Bearish Scenario

A sustained move under 33461 will signal the presence of sellers. If this move generates enough downside pressure then look for a test of the Fibonacci level at 32665. We could see a technical bounce on the first test of this level, but if it fails then look for the selling pressure to possibly extend into last week’s low at 32167.

Side Notes

The price action suggests investors aren’t too rattled by the situation in Ukraine. It almost looks like they expect Russia to win the war. It’s going to take time for the sanctions to work if at all, which may be why buyers have been trying to prop up the market since the sharply lower opening.

Day-traders should also be paying close attention to the overnight opening price at 33678. Overtaking this level could trigger some strong intraday short-covering.