E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Early Tone Set by Reaction to 29826

March E-mini Dow Jones Industrial Average futures are edging lower shortly after the pre-market opening on Sunday night stateside. Ahead of the day’s trading session, investors are facing headlines in what could be another volatile opening to a holiday shortened week.

At 23:14 GMT, March E-mini Dow Jones Industrial Average futures are trading 30074, down 35 or -0.12%.

According to Reuters, the U.S. government is headed toward a chaotic last few days of the year as President Donald Trump’s refusal to approve a $2.3 trillion financial package caused millions of jobless Americans to lose benefits and threatened to shut down federal agencies due to lack of funding.

Trump, who leaves office on January 20 after losing November’s election, came under pressure on Sunday from lawmakers on both sides to stop blocking the pandemic aid and government funding bill which was approved by Congress last week.

The announcement of the new stimulus package helped take the Dow higher, but uncertainty over the signing of the bill is expected to encourage some investors to lighten up on the long side. Since this is a traditionally low volume holiday-shortened week, we could see heightened volatility with many of the major players taking to the sidelines.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The trend turned down last Monday when sellers took out the previous main bottom at 29624. It was reaffirmed when the next main bottom at 29350 failed to hold.

A trade through 30333 will change the main trend to up, while a move through 29318 will signal a resumption of the downtrend.

The minor range is 30333 to 29318. Its 50% level at 29826 is support. This level is also controlling the short-term direction of the Dow.

The main range is 25872 to 30333. If the downtrend resumes on a move through 29318 then its retracement zone at 28103 to 27576 will become the primary downside target zone.

Early Outlook

Look for an upside bias early Monday as long as the pivot at 29826 continues to provide support. If this creates enough upside momentum then look for the rally to possibly lead to a retest of the record high at 30333.

A failure to hold 29826 will indicate the presence of sellers. This could create the downside momentum needed to challenge last week’s low at 29318.

For a look at all of today’s economic events, check out our economic calendar.