E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Needs to Hold 30313 to Sustain Momentum

March E-mini Dow Jones Industrial Average futures jumped to a record high on Monday to start the final trading week of 2020 after President Donald Trump signed an economic relief bill.

Trump signed a $900 billion COVID-19 relief bill into law, averting a government shutdown and extending unemployment benefits to millions of Americans. The signing came days after Trump suggested he would veto the legislation, demanding $2,000 direct payments to Americans, instead of $600. Later in the session, the House voted to approve a $2,000 direct payment, but the GOP-led Senate is not expected to push it through.

On Monday, March E-mini Dow Jones Industrial Average futures settled at 30313, up 204 or +0.67%.

In other news, Apple led the Dow higher, rising 3.6%. Disney also contributed to the gains, climbing nearly 3%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was reaffirmed on Monday when buyers took out the previous main top at 30333. A trade through 30418 will signal a resumption of the uptrend on Tuesday. A trade through 29318 will change the main trend to down.

The minor range is 29318 to 30418. Its 50% level at 29868 is the nearest support. This target will rise as the Dow moves higher.

Daily Swing Chart Technical Forecast

The key number to watch is yesterday’s close at 30313. Trader reaction to this level will determine the direction of the March E-mini Dow Jones Industrial Average on Tuesday.

Bullish Scenario

A sustained move over 30313 will indicate the presence of buyers. Taking out 30418 will indicate the buying is getting stronger. Under normal conditions we would be looking for an acceleration to the upside since there is no resistance. But since the volume is expected to be well below average, it could be risky chasing the market higher at current price levels so we’re not expecting an acceleration.

Bearish Scenario

A sustained move under 30313 will signal the presence of sellers. If this move creates enough downside momentum then look for a potential break into 29868. The selling could extend even further if this level fails as support.

Keep in mind that the market is likely to move lower faster than it will rally.

Side Notes

A higher-high, lower-close will form a potentially bearish closing price reversal top. If confirmed, this could trigger the start of a two to three day correction.

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