E-mini Dow Jones Industrial Average (YM) Futures Analysis – Trader Reaction to Gann Angle at 25249 Will Determine Direction This Week

The Dow Jones Industrial Average futures broke the 25,000 barrier last week for the first time in history. Momentum is driving the Dow higher so when the buying momentum stops, the market will correct. There is no resistance so it’s going to be a chart pattern like a closing price reversal top that tells us when the correction is about to begin.

We also think investors should start preparing for increased volatility. Last year, volatility was nearly nonexistent, as indicated by the VIX index dropping to its lowest level ever.

Last week, March E-mini Dow Jones Industrial Average futures settled at 25269, up 534 or +2.16%.

Weekly Technical Analysis

The main trend is up according to the weekly swing chart. A trade through 25282 will reaffirm the uptrend. However, a break through this level then a move under last week’s close at 25269 will put the Dow in a position to form a potentially bearish closing price reversal top. This move will indicate the selling is greater than the buying at current price levels.

The short-term range is about 23201 to 25359. If there is a correction then its retracement zone at 24280 to 24025 will become the primary downside target.

The main range is about 21575 to 25359. Its retracement zone comes in at 23467 to 23020.

Weekly Technical Forecast

Based on last week’s close at 25269 and the price action, the direction of the Dow futures contract will be determined by trader reaction to the steep uptrending Gann angle at 25249.

A sustained move over 25249 will signal the presence of buyers. This move will put the Dow in an extremely bullish position.

A sustained move under 25249 will indicate the presence of sellers. The daily chart is wide open under this angle so if the selling volume increases, we could see the start of a steep break to the downside with potential targets coming in at 24280 and 24225. This is followed by 24025 and 24007.