E-mini Dow Jones Industrial Average (YM) Futures Analysis – Needs to Hold 25761 to Sustain Rally

March E-mini Dow Jones Industrial Average futures are being driven higher by strong earnings this week. The market hit a new record high on Tuesday. There is no resistance at this time, but the prolonged move up in terms of price and time makes it susceptible to a potentially bearish closing price reversal top. This appears to be the only pattern that can stop this rally at this time.

Weekly Technical Analysis

A reversal top won’t change the trend, but it will shift momentum to the downside at least temporarily. The key number to watch is last week’s close at 26046. As long as this price holds then the bull market will remain intact. Taking out this level or closing below it on Friday will be a strong sign that the selling is greater than the buying at current price levels.

Based on the current chart pattern, the Dow is being guided higher by a steep uptrending Gann angle moving up at a rate of 256 points per week since the last minor bottom at 23201 during the week-ending November 17.

The Gann angle target this week is at 26951. It is a steep uptrending angle from the 21575 main bottom from the week-ending September 1.

Weekly Technical Forecast

Based on the current price at 26226 and this week’s price action, the direction of the Dow the rest of the week will be determined by trader reaction to the steep Gann angle at 25761. The rally will continue as long as it holds. However, if it fails then look for a possible acceleration to the downside.