E-mini Dow in Position to Challenge 33461 – 32665

March E-mini Dow Jones Industrial Average futures plunged on Monday in a thin-holiday trade after Russian President Vladimir Putin recognized then ordered the Russian army into two breakaway regions in eastern Ukraine. Although Moscow called it a peacekeeping operation the move actually raised concerns about a major war.

In response, the White House said U.S. President Joe Biden would soon issue an executive order prohibiting economic activity between the two regions of Ukraine and U.S. individuals. Britain also vowed to impose sanctions.

On Monday, the March E-mini Dow Jones Industrial Average futures contract settled at 33699, down 308 or -0.91%.

The U.S. cash stock markets were closed on Monday for the Presidents Day holiday, but the price action in the futures market indicates traders should prepare for a volatile lower opening.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 33031 will reaffirm the downtrend. A move through 35060 will change the main trend to up.

The main range is 30089 to 36832. Its retracement zone at 33461 to 32665 is the primary downside target. This zone stopped the selling on January 24 at 33031.

The short-term range is 33031 to 35752. The E-mini Dow closed on the weak side of its retracement zone at 34068 to 34389, making it resistance.

Short-Term Outlook

The direction of the March E-mini Dow Jones Industrial Average futures contract early Tuesday is likely to be determined by trader reaction to 34068.

Bearish Scenario

A sustained move under 34068 will indicate the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into the minor bottom at 33532, followed by the major 50% level at 33461.

A move through 33461 will indicate the selling pressure is getting stronger. This could trigger a sharp break into the main bottom at 33031, followed by the support cluster at 32699 to 32665.

Bullish Scenario

A sustained move over 34068 will signal the presence of buyers. This could trigger a fast rally into the short-term 50% level at 34389.

Overtaking 34389 will indicate the buying is getting stronger. This could trigger an acceleration to the upside with 34932 the next likely upside target. This is the last potential resistance level before the 35060 main top.