E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis –Selling Pressure Increases Under 28210

March E-mini Dow Jones Industrial Average futures are trading lower at the mid-session. The selling pressure has been intense with today’s losses wiping out the cash market’s gains for January. The catalyst behind the selling pressure are increasing worries about the potential economic impact of China’s fast-spreading coronavirus.

Another catalyst is fear going into the weekend. Investors don’t expect any improvements over the weekend and are trimming stock market exposure on Friday. Meanwhile, speculators are betting on a more severe drop for Monday when China’s stock markets reopen after being shut down for more than a week.

If think the Shanghai Index could open 5 to 10% lower on February 3.

At 20:44 GMT, March E-mini Dow Jones Industrial Average futures are trading 28213, down 579 or -2.01%.

Daily Technical Analysis

The main trend is down according to the daily swing chart. The trend turned down on Friday when sellers took out the previous swing bottom at 28405. The next target is the January 8 main bottom at 28084. A trade through 28888 will change the main trend to up.

The short-term range is 28084 to 29362. Its 50% level at 28723 is potential resistance. Another 50% level at 28538 is also potential resistance.

The intermediate range is 27297 to 29362. Its retracement zone at 28330 to 28086 is currently being tested.

The main range is 25710 to 29362. Its retracement zone at 27536 to 27105 is the next major downside target zone. This zone is controlling the near-term direction of the Dow. Look for a technical bounce on the first test of this target zone.

Daily Technical Forecast

Based on the early price action and the current price at 28213, the direction of the March E-mini Dow Jones Industrial Average futures contract the rest of the session on Friday is likely to be determined by trader reaction to a steep downtrending Gann angle at 28210.

Bearish Scenario

Crossing to the weak side of the downtrending Gann angle at 28210 will indicate the selling is getting stronger. This could trigger a break into the Fibonacci level at 28086.

If 28086 fails as support then look for the selling to possibly extend into an uptrending Gann angle at 27937. This is also a potential trigger point for an acceleration into 27617 and 27536.

The major support area is the retracement zone at 27536 to 27105. Inside this zone is the main bottom at 27297.