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James Hyerczyk
E-mini Dow Jones Industrial Average

Blue chip stocks are set to open lower on Monday with traders showing little reaction to the reopening of the government after a 35 day partial shutdown. The muted reaction could be suggesting investors don’t trust the government. Also on the plate for investors this week is the start of the U.S. Federal Reserve’s two-day monetary policy meeting, two days of high level trade negotiations between the United States and China and Friday’s U.S. Non-Farm Payrolls report.

At 1246 GMT, March E-mini Dow Jones Industrial Average futures are trading 24526, down 170 or -0.69%.

Daily March E-mini Dow Jones Industrial Average

Daily Technical Analysis

The main trend is up according to the daily swing chart. A trade through 24830 will signal a resumption of the uptrend, while taking out 24860 will reaffirm the uptrend. The main trend is safe at this time.

The minor trend is also up. A trade through 24216 will change the minor trend to down.

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

The main range is 22563 to 24830. If the minor trend changes to down then look for a possible pullback into its retracement zone at 23697 to 23429.


Daily Technical Forecast

Based on the early price action and the current price at 24526, the direction of the March E-mini Dow Jones Industrial Average on Monday is likely to be determined by trader reaction to the uptrending Gann angle at 24483.

Bullish Scenario

A sustained move over 24483 will indicate the presence of buyers. If this move can generate enough upside momentum then look for a retest of Friday’s high at 24830, followed by the main top at 24860, the major Fibonacci level at 24890 and the downtrending Gann angle at 24958.

The trigger point for a potential acceleration to the upside is the downtrending Gann angle at 24958. The daily chart indicates there is plenty of room to rally with the next target angle coming in at 25534.

Bearish Scenario

A sustained move under 24483 will signal the presence of sellers. If this attracts enough sellers then look for a potential plunge into the main 50% level at 24234, followed by the uptrending Gann angle at 24140. This is another trigger point for an acceleration to the downside with the 50% level at 23697 the next likely downside target.

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