E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Pivot at 28617 Controlling Price Action

March E-mini Dow Jones Industrial Average futures are trading lower at the mid-session after the U.S. confirmed that an airstrike killed Iran’s top military commander. The news encouraged investors to trim their stock positions and move their funds into safe-haven assets like U.S. Treasurys and Japanese Yen.

Heightened geopolitical concerns could keep a lid on stock prices over the near-term. Worries about retaliation from Iran could also help limit gains.

At 18:26 GMT, March E-mini Dow Jones Industrial Average futures are trading 28668, down 173 or -0.60%.

A weaker-than-expected reading on the manufacturing economy also weighed on stocks. December’s ISM manufacturing index came in at 47.2, the weakest in a decade and smaller than the 49 reading expected by economists polled by Dow Jones.

Daily Technical Analysis

The main trend is up according to the daily swing chart. Unlike the March E-mini S&P 500 Index, the Dow did not change trend. A trade through 28341 will change the main trend to down. A move through the intraday high at 28893 will signal a resumption of the uptrend.

The first minor range is 28341 to 28893. Its 50% level or pivot at 28617 is controlling the intraday direction of the market.

The second minor range is 27715 to 28893. Its retracement zone at 28304 to 28165 is the next downside target area.

The main range is 27297 to 28893. Its retracement zone at 28095 to 27907 is the primary downside target. It also represents value so look for buyers to step in on the first test of this area.

Daily Technical Forecast

Based on the early price action and the current price at 28668, the direction of the March E-mini Dow Jones Industrial Average into the close is likely to be determined by trader reaction to the pivot at 28617.

Bearish Scenario

A sustained move under 28617 will indicate the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into the uptrending Gann angle at 28405, followed by the main bottom at 28341.

Taking out 28341 will change the main trend to down. This could trigger a quick break into the 50% level at 28304. This is followed by another uptrending Gann angle at 28227 and a Fibonacci level at 28165.

Bullish Scenario

A sustained move over 28617 will signal the presence of buyers. Overcoming the uptrending Gann angle at 28641 will indicate the buying is getting stronger. If this creates enough upside momentum then look for the rally to possibly extend into the next uptrending Gann angle at 28739.

Overcoming 28739 will put the index in a strong position with the next target the record high at 28893.

Side Note

A close under 28841 will form a potentially bearish closing price reversal top. If confirmed on Monday, this could trigger the start of a 2 to 3 day sell-off or a 50% to 61.8% retracement of the rally from December 3.