E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Setting Up for 2-3 Week Correction

March E-mini Dow Jones Industrial Average futures are trading lower late in the session on Friday after an earlier attempt to rebound from a two-day rout failed to attract enough buyers to extend the move. Nonetheless, the blue chip average remains fragile with fears of a rise in inflation keeping U.S. bond yields near a one-year high.

At 20:52 GMT, March E-mini Dow Jones Industrial Average futures are trading 31136, down 235 or -0.75%.

Helping to contribute to the weakness in the Dow average are components Apple Inc and Microsoft Corp, whose shares were headed for their worst weekly performance in months.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The trend turned down earlier in the session when sellers took out the previous main bottom at 31103. The trend will change back to up on a trade through the last main top at 32033.

The selling started on Thursday with the formation of the closing price reversal top that shifted momentum to the downside.

The new minor range is 32033 to 30886. Its retracement zone at 31450 to 31587 is new resistance.

The short-term range is 29552 to 32033. Its 50% level at 30793 is the next likely downside target.

The main support zone is 30676 to 30355. Not only is this area support, but It is also controlling the near-term direction of the Average.

Short-Term Outlook

The key level to watch into the close is 31433. Given the prolonged move up in terms of price and time and the new record high on February 25, a close below 31433 will produce a potentially bearish weekly closing price reversal top. If confirmed, this chart pattern can trigger the start of a 2 to 3 day correction.