E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Needs to Hold 25548 to Sustain Eight-Week Rally

March E-mini Dow Jones Industrial Average futures soared last week on increased optimism the U.S. and China will reach a trade deal before the March 1 deadline. Signs that this date may even be flexible according to comments from President Trump also fueled some of the rally. Further contributions to the rally came after a deal between Democrats and Republicans helped avert another government shutdown.

Last week, March E-mini Dow Jones Industrial Average futures settled at 25888, up 807 or +3.12%.

The New York Stock Exchange is closed today along with the Chicago Mercantile Exchange and the U.S. Treasury because of the U.S. President’s Day holiday. The low volume price action is taking place on the Globex electronic trading system. It will close early today.

Weekly Technical Analysis

The main trend is down according to the daily swing chart, however, momentum has been trending higher since the formation of a closing price reversal bottom at 21452 the week-ending December 28.

A trade through 26110 will change the main trend to up. The Dow is up eight weeks from its last main bottom, which puts it in a position to post a potentially bearish closing price reversal top.

The main range is 27015 to 21452. Its retracement zone at 24890 to 24234 is controlling the direction of the market. Trading above this zone is helping to generate a strong upside bias.

Weekly Technical Forecast

Based on the price action of the eight week rally, the direction of the March E-mini Dow Jones Industrial Average futures contract this week is likely to be determined by trader reaction to a steep uptrending Gann angle at 25548. This angle is moving up at a rate of 512 points per week.

Bullish Scenario

A sustained move over the angle at 25548 will indicate the presence of buyers. The first upside target this week is the main top at 26110. Taking out this level will change the main trend to up on the weekly chart. The next target is the 26300 main top.

Taking out 26300 will indicate the buying is getting stronger with the next target angle at 26375. This is followed by additional target angles at 26695 and 26855. The latter is the last potential resistance angle before the 27015 main top.

Bearish Scenario

A sustained move under 25548 will signal the presence of sellers. This will be the first sign of weakness in eight weeks. If this creates enough downside momentum then look for the selling to possibly extend into 24890 to 24234.