E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Reaction to 29780 Sets Tone into Close

March E-mini Dow Jones Industrial Average futures are trading flat to lower shortly after the mid-session on Thursday as investors weighed signs of progress in fiscal stimulus talks against data showing a surge in jobless claims, while energy stocks soared on a sharp jump in oil prices.

At 18:55 GMT, March E-mini Dow Jones Industrial Average futures are trading 29892, down 74 or -0.25%.

The blue chip average is being underpinned by positive comments from U.S. Treasury Secretary Steven Mnuchin who said talks between Republicans and Democratic senators on COVID-19 relief were making “a lot of progress” with more discussions expected in the day.

The faltering labor market recovery and the recent surge in COVID-19 infections have piled pressure on policymakers to come up with another rescue package, as most of the financial aid from the government has dried up.

In other news, the Dow Jones Transportation Average, often seen as a barometer of economic health, dropped about 1.4%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, but yesterday’s closing price reversal top signals that momentum may be getting ready to shift to the downside.

A trade through 30209 will negate the closing price reversal top and signal a resumption of the uptrend. A move through 29350 will change the main trend to down.

The minor trend is also up. A trade through 29761 will change the minor trend to down. This will also shift momentum to the downside.

The minor range is 29350 to 30209. Its 50% level at 29780 is support. This level stopped the selling on Thursday.

The main range is 25872 to 30209. If the main trend changes to down then its retracement zone at 28041 to 27529 will become the primary downside target. This is also a value zone so look for buyers on the first test of this area.

Short-Term Outlook

The direction of the March Dow Jones Industrial Average into the close will likely be determined by trader reaction to the pivot at 29780.

Bullish Scenario

A sustained move over 29780 will indicate the presence of buyers. If this creates enough upside momentum then look for buyers to make a run at 30209.

Bearish Scenario

A sustained move under 29780 will signal the presence of sellers. Taking out the minor bottom at 29761 will change the minor trend to down. This could trigger an acceleration to the downside with the next targets a minor bottom at 29500 and a main bottom at 29350.