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James Hyerczyk
E-mini Dow Jones Industrial Average
E-mini Dow Jones Industrial Average

March E-mini Dow Jones Industrial Average futures are called lower as investors continue to press the stock market lower following last week’s plunge. The Dow posted its worst week since October 2008 during the financial crisis. This year’s losses have also but the blue chip average on the brink of a bear market.

Other than short-covering or profit-taking ahead of Tuesday’s Christmas holiday, there doesn’t seem to be anything in the cards that could stop the selling from continuing today. Sellers are continuing to respond to bearish factors such as rising interest rates, the lingering trade dispute between the U.S. and China, and plunging crude oil prices. Additionally, fear is also being generated by the government shutdown.

At 1413 GMT, March E-mini Dow Jones Industrial Average futures are trading 22259, down 148.00 or -0.66%.

Daily March E-mini Dow Jones Industrial Average

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The market is in no position to change the main trend to up, but it is inside the window of time for a closing price reversal bottom.

Providing support today is a major 50% to 61.8% retracement zone at 22151 to 21011. This area represents a retracement of the rally fueled by the election of President Trump on November 9, 2016.

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Daily Swing Chart Technical Forecast

Based on the early price action, the direction of the March E-mini NASDAQ-100 index futures contract is likely to be determined by trader reaction to Friday’s close at 22407.

Bullish Scenario

Given the prolonged move down in terms of price and time, overcoming and sustaining a move over 22407 will indicate the return of buyers. This could trigger an intraday short-covering rally. A close over this level will form a closing price reversal bottom. This could fuel the start of a 2 to 3 day counter-trend rally.

Bearish Scenario

A sustained move under 22407 will signal that the selling pressure is getting stronger. If this move creates enough downside momentum then look for a test of the 50% level at 22151. If this price level fails then look for a possible acceleration to the downside with the next target the Fibonacci level at 21011.

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