E-mini Dow Jones Industrial Average (YM) Futures Analysis – Friday’s Rally Rejected by 23156 to 23558 Retracement Zone

March E-mini Dow Jones Industrial Average futures closed lower on Friday, giving up most of its early session gains. Traders were likely taking profits and squaring positions ahead of the week-end, Monday’s holiday shortened session and Tuesday’s exchange holiday. Volatility remained at heightened levels as concerns over the partial government shutdown still lingered.

On Friday, March E-mini Dow Jones Industrial Average futures settled at 23035, down 118 or -0.51%.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, however, momentum shifted to the upside with the formation of a closing price reversal bottom on December 26 and its subsequent confirmation on December 27.

The main trend will change to up on a trade through 24860. A move through 21452 will negate the closing price reversal bottom and signal a resumption of the downtrend.

Several retracement zones played a role in last week’s volatile, two-sided price trade. The most important was the long-term major retracement zone at 22151 to 21011. Last week’s low at 21452 was formed inside this zone.

The main range is 26110 to 21452. Its retracement zone at 23781 to 24331 is the primary upside target.

The intermediate range is 24860 to 21452. Its retracement zone at 23156 to 23558 acted like resistance and stopped the rally on Friday at 23372.

The short-term range is 21452 to 23372. Its 50% level or pivot at 22412 is the primary downside target.

Daily Swing Chart Technical Forecast

Based on Friday’s price action and the close at 23156, the direction of the March E-mini Dow Jones Industrial Average on Monday is likely to be determined by trader reaction to the 50% level at 23156.

Bullish Scenario

A sustained move over 23156 will indicate the presence of buyers. If this move attracts aggressive counter-trend buyers then look for a labored rally to extend into Friday’s high at 23372, a Fibonacci level at 23558 and a 50 % level at 23781.

Bearish Scenario

A sustained move under 23156 will signal the presence of sellers. The daily chart indicates there is plenty of room to break so don’t be surprised by an acceleration to the downside. The first target is the short-term 50% level at 22412. Watch for aggressive counter-trend buyers on the initial test of this level. If it fails then look for the selling to extend into the major 50% level at 22151.