E-mini Dow Jones Industrial Average (YM) Futures Analysis – Key Level Controlling Direction into Close is 23156

March E-mini Dow Jones Industrial Average futures are trading higher shortly before the cash market and futures close. Not only is the market continuing the counter-trend rally that began two days ago, it is also in a position to post a weekly closing price reversal bottom. This could signal the start of a 2 to 3 week counter-trend rally.

At 2007 GMT, the March E-mini Dow Jones Industrial Average is trading 23212, up 59 points or +0.25%.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. However, momentum is trending higher due to Wednesday’s closing price reversal bottom and subsequent confirmation on Thursday. A trade through 24860 will change the main trend to up. The downtrend will resume if 21452 is taken out.

On the downside, the first support is a long-term 50% level at 22151.

The short-term range is 24860 to 21452. The market is currently testing its retracement zone at 23156 to 23558. This zone is very important to the short-term structure of the market.

Since the main trend is down, sellers are likely to come in on a test of 23156 to 23558. If successful, a new secondary lower top will form. Aggressive counter-trend buyers are going to try to drive the market through this zone.

The main range is 26110 to 21452. Its retracement zone is another potential target at 23781 to 24331. Once again, sellers are likely to show up on a test of this zone.

The combination of these two retracement zones creates a potential resistance cluster at 23558 to 23781. This is the best upside target today. Watch for sellers on a test of this area.

Forecast

Based on the current price action, the direction of the March E-mini Dow Jones Industrial Average into the close is likely to be determined by trader reaction to the short-term 50% level at 23156.

Bullish Scenario

A sustained move over 23156 will indicate the presence of buyers. If this move generates enough upside momentum then look for a rally into the close with the potential target the resistance cluster at 23558 to 23781.

Bearish Scenario

A sustained move under 23156 will signal the presence of sellers. If this move generates enough downside momentum then we could see a drive through yesterday’s close at 23153. If aggressive counter-trend buyers fail to show up on a test of this level then the index will close lower for the session.

The index will need to close over 22407 in order to form a weekly closing price reversal bottom.