James Hyerczyk
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E-mini Dow Jones Industrial Average

March E-mini Dow Jones Industrial Average futures jumped higher on Monday, the first session of February, as nervous investors, including Wall Street professionals, appeared to shake off concerns about a speculative retail trading mania that largely drove the major stock indexes’ worst weekly sell-off since October. The blue chip average was led higher by strong performances in Microsoft, Apple and Visa.

At 21:41 GMT, March E-mini Dow Jones Industrial Average futures are trading 3761.25, up 56.00 or +1.51%.

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Monday’s rebound marked a huge change after Wall Street’s main indexes last week logged their steepest weekly fall since October, as investors digested efficacy data from Johnson & Johnson’s COVID-19 vaccine trial results, and a battle between Wall Street hedge funds and retail investors added to volatility.

In economic news, the latest ISM survey was mixed as U.S. manufacturing activity slowed slightly in January, while a measure of prices paid by factories for raw materials and other inputs jumped to its highest level in nearly 10 years.

Daily March E-mini Dow Jones Industrial Average

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, but momentum may be getting ready to shift to the upside with the formation of a potentially bullish closing price reversal bottom on Monday.

A trade through 29552 will negate the closing price reversal bottom and signal a resumption of the downtrend, while a trade through 31188 will change the main range trend to up.

The short-term range is 29318 to 31188. Its retracement zone at 30032 to 30253 was tested on Monday.

The minor range is 31188 to 29552. Its 50% to 61.8% retracement zone at 30320 to 30563 is the primary upside target. Since the main trend is down, sellers could come in on a test of this area.

The main range is 25872 to 31188. If the downtrend is reaffirmed on a break through the main bottom at 29318 then look for the selling to possibly extend into its retracement zone at 28530 to 27903.


Short-Term Outlook

Based on Monday’s price action, the direction of the March E-mini Dow Jones Industrial Average early Tuesday is likely to be determined by trader reaction to 30032 to 30253.

Bearish Scenario

The bearish tone will resume on a sustained move under 30032. This could lead to a retest of 29552 if the selling is strong enough. Taking out this level should lead to a quick test of 29318, which is the trigger point for an acceleration to the downside.

Bullish Scenario

A sustained move over 30032 will signal the presence of sellers, while overtaking 30253 could extend the rally. However, the move is likely to be labored because of potential resistance at 30320 and 30563.

The trigger point for an acceleration to the upside is 30563. Taking out this level could fuel a rally into 31188 over the near-term.

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

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