E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Crossing 24890 Puts Dow on Bullish Side of Major Retracement Zone

Blue chip stocks closed higher on Friday after President Trump announced that he reached a continuing resolution deal with Congress to reopen the U.S. government. Further support was provided by a report from The Wall Street Journal which said U.S. Federal Reserve policymakers are nearing a decision on when to end its balance sheet reduction program. Investors read the news as a form of easing which tends to be supportive for higher risk assets.

On Friday, March E-mini Dow Jones Industrial Average futures settled at 24696, up 238 or +0.96%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 24860 will signal a resumption of the uptrend. The next main top target comes in at 26110.

The main trend is safe at this time. A trade through 22563 will change it to down. However, this type of rally usually ends with a dramatic closing price reversal top. This pattern won’t change the main trend to down, but it will indicate the selling is greater than the buying at current price levels.

The minor trend is also up. A trade through 24216 will change the minor trend to down. This will also shift momentum to the downside. This could trigger a break all the way into the next minor bottom at 22563.

The major retracement zone at 24234 to 24890 is currently being tested. This zone is controlling the longer-term direction of the market.

We don’t know when it will happen, but at some point in this rally, the market will retrace the rally from 22563 and from 21452. The closing price reversal top usually tips us off before this correction begins.

Daily Swing Chart Technical Forecast

Based on last week’s price action and the close at 24696, the direction of the March E-mini Dow Jones Industrial Average on Monday is likely to be determined by trader reaction to the major Fibonacci level at 24890.

Bullish Scenario

A sustained move over 24890 will indicate the presence of buyers. The daily chart shows there is no resistance until 26110. We could see an acceleration to the upside or another prolonged move up.

Bearish Scenario

The inability to take out or sustain a rally over 24890 will signal the presence of sellers. If this move creates enough downside momentum then look for a further break into the main 50% level at 24234 and the minor bottom at 24216.

The minor bottom at 24216 is a potential trigger point for an acceleration to the downside with the first target the next minor bottom at 23640. When 24216 starts to fail then start calculating the retracement zone targets.