E-mini Dow Jones Industrial Average (YM) Futures Analysis – In the Window of Time for Potentially Bearish Closing Price Reversal Top

March E-mini Dow Jones Industrial Average futures surged to the upside last week as investors continued to react to better-than-expected earnings, optimism over the tax reform plan and strong global economic growth.

This week, investors will have the opportunity to react to President Trump’s State of the Union speech on Tuesday night, the Fed’s monetary policy statement on Wednesday and Friday’s U.S. Non-Farm Payrolls report.

Weekly Swing Chart Analysis

The main trend is up according to the daily swing chart. However, this is the tenth week since the last swing bottom, putting the market in the window of time for a potentially bearish closing price reversal top.

The formation of a closing price reversal top will not mean the trend is getting ready to turn lower, but it could alleviate some of the upside pressure that could overheat the market and cause a bigger correction later in the year. Often it leads to a 2 to 3 week break, and/or a 50% to 61.8% correction of the last rally.

A trade through 26608 will signal a resumption of the uptrend.

The current range is 23201 to 26608. Its retracement zone is 24905 to 24502.

The next range is 21575 to 26608. Its retracement zone is 23542 to 22818.

These levels will give you an idea of just how much the market could correct if a reversal top forms.

Weekly Swing Chart Forecast

The direction of the E-mini Dow futures contract this week is likely to be determined by trader reaction to last week’s high at 26608 and last week’s close at 26604.

A sustained move over 26608 will indicate the presence of strong buyers.

Taking out 26608 then breaking back below 26604 will signal the presence of sellers.

Taking out 26608 then closing below 26604 will form a closing price reversal top.