E-mini Dow Jones Industrial Average (YM) Futures Analysis – Could Plunge if 26017 is Taken Out With Big Volume

March E-mini Dow Jones Industrial Average futures are trading lower for the week and are currently in a position to post a potentially bearish weekly closing price reversal top. The chart pattern doesn’t mean the trend is getting ready to turn down, but it will indicate that the selling is greater than the buying at current price levels.

If confirmed next week, this chart pattern could lead to the start of a 2 to 3 week correction, or a 50% retracement of its current rally.

The key number to watch the rest of the week is last week’s close at 26604. Crossing to the strong side of this level will put the Dow in a position to challenge the high of the week. The inability to recapture this level will mean the selling is getting stronger.

The main trend is up according to the weekly swing chart. A trade through 26684 will signal a resumption of the uptrend.

The short-term range is 23201 to 26684. Its retracement zone at 24943 to 24532 is the first downside target.

The main range is 21575 to 26684. Its retracement zone comes in at 24130 to 23527.

Forecast

Based on the price action this week, the direction of the Dow the rest of the week is likely to be determined by trader reaction to the steep uptrending Gann angle at 26017.

A sustained move over 26017 will indicate the presence of buyers. They are going to try to generate enough upside momentum to turn the market higher for the week and make a new high.

A sustained move under 26017 will signal the presence of sellers. The weekly chart is wide open to the downside so we could see an acceleration into the next target, the 50% level at 24943.