E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Sentiment Shift Rekindles Bullish Tone

March E-mini Dow Jones Industrial Average futures bounced back from a series of setbacks on Friday as stronger-than-expected U.S. jobs data boosted optimism for a speedier economic recovery. The blue chip average received an additional boost as Treasury bond yields eased after soaring earlier in the session in reaction to government report.

On Friday, March E-mini Dow Jones Industrial Average futures settled at 31465, up 587 or +1.87%.

The Dow was led higher by components Apple and Microsoft, which gained 1% and 2% respectively.

While an optimistic outlook for the economy may have stop the selling pressure on Friday, price climbed throughout the session as bond yields retreated from their session highs. The 10-year Treasury yield eased back to 1.55% after popping above 1.6% to touch a 2021 high following data showing a surge in jobs growth.

In breaking news, the Dow could rally early Monday in reaction to the news that the Senate passed a $1.9 trillion coronavirus relief package on Saturday as Democrats rush to send out a fresh round of aid. Although the news may have been priced into the market for weeks, the announcement could trigger strong kneejerk buying especially since some shares have hit oversold territory.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 30512 will signal a resumption of the downtrend. The main trend will change to up on a move through the record high at 32033.

The minor trend is also down. A trade through 31637 will change the minor trend to up. This will also shift momentum to the upside.

The minor range is 32033 to 30512. On Friday, the Dow closed on the strong side of its 50% level at 31273. Trader reaction to this level is likely to set the tone on Monday.

The short-term range is 29552 to 32033. Its 50% level at 30793 is support.

The main range is 23918 to 32033. Its retracement zone at 30676 to 30355 stopped the selling last week at 30512.

The Dow also found support when buyers came in to defend the December 31 close at 30497.

Short-Term Outlook

The direction of the March E-mini Dow Jones Industrial Average on Monday is likely to be determined by trader reaction to the minor pivot at 31273.

Bullish Scenario

A sustained move over 31273 will indicate the presence of buyers. The first upside target is the minor top at 31637. Taking out this level could create the upside momentum needed to challenge the record high at 32033.

Bearish Scenario

A sustained move under 31273 will signal the presence of sellers. If this generates enough downside momentum then look for the selling to possibly extend into a series of potential support levels at 30793, 30676, 30497 and 30355.

Side Notes

Given the positive news over the weekend, we should know on the pre-market opening whether investors consider the passing of the COVID relief bill as bullish.

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