E-mini Dow Jones Industrial Average (YM) Futures Analysis – March 23, 2017 Forecast

June E-mini Dow Jones Industrial Average futures are expected to open lower on Thursday as investors monitored key reports, a speech by Fed Chair Janet Yellen and a major vote in the U.S. House of Representatives.

Earlier today, weekly initial jobless claims rose 15,000 to 258,000, above the expected 240,000. A report on new home sales is scheduled for 1400 GMT. Fed Chair Janet Yellen gave a speech but did not comment on monetary policy.

The major event today is the vote on the Republican health care bill. If signed into law, it would repeal and replace Obamacare. If the vote fails then stocks could plunge because this will likely mean a further delay in Trump’s plans to reform taxes, relax regulations and increase spending on infrastructure.

Technical Analysis

The main trend is up according to the daily swing chart. However, momentum shifted to the downside earlier in the week when a number of minor bottoms were taken out by sellers.

A trade through 20525 will signal a resumption of the downtrend. A move through 21106 will change the main trend to up.

The main range is 19654 to 21106. Its retracement zone at 20380 to 20209 is the primary downside target. An uptrending angle passes through this zone at 20230, making it a valid downside target also. Since the main trend is up, we could see a technical bounce on the first test of this zone.

The new short-term range is 21106 to 20525. Its retracement zone at 20816 is the primary upside target. This level is controlling the short-term direction of the market.

Forecast

Based on the current price at 20611 and the earlier price action, the direction of the Dow today is likely to be determined by trader reaction to the downtrending angle at 20594.

A sustained move over 20594 will signal the presence of buyers. This could create enough upside momentum to trigger a move into a cluster of numbers at 20806, 20816 and 20850.

The inability to overcome 20594 will indicate the presence of sellers. The first downside target is 20525. If this price fails as support then look for the selling to extend down to 20380 then the support cluster at 20230 to 20209.

Watch the price action and read the order flow at 20594 all session today.