E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Testing Major Retracement Area

March E-mini Dow Jones Industrial Average futures are down on Monday, pressured by worries about the impact of tighter COVID-19 curbs on the global economy, and a potentially devastating setback to President Joe Biden’s investment bill.

The downward move in markets “reflecting growing uncertainty surrounding whether the Omicron surge will bring new widespread economic shutdowns, an expected shelving of additional fiscal stimulus from President Biden’s Build Back Better plan, and a breach by the S&P 500 Index of its 50-day moving average,” said Jim Paulsen, chief investment strategist at the Leuthold Group.

At 15:57 GMT, March E-mini Dow Jones Industrial Average futures are trading 34590, down 662 or -1.88%.

Losses are being spread across all sectors led by Goldman Sachs, down 3.72%, followed by Caterpillar Inc, off by 3.63% and Travelers Companies Inc, down 3.48%.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The downtrend resumed earlier today when sellers took out 35164. The next main bottom target is 33860. A trade through this level will reaffirm the downtrend. A move through 36098 will change the main trend to up.

The short-term range is 33860 to 36098. The E-mini Dow is currently trading on the weak side of its retracement zone at 34979 to 34715, making it potential resistance.

The main range is 33300 to 36330. The market is currently testing its retracement zone at 34815 to 34457. This zone is controlling the near-term direction of the market.

Daily Swing Chart Technical Forecast

The direction of the March E-mini Dow Jones Industrial Average into the close on Monday is likely to be determined by trader reaction to 34715.

Bearish Scenario

A sustained move under 34715 will indicate the presence of sellers. The next downside target is the main Fibonacci level at 34457.

Look for a technical bounce on the first test of 34457, but if it fails then prepare for an acceleration to the downside with the next target the main bottom at 33860. This price is also the trigger point for an acceleration into another main bottom at 33300.

Bullish Scenario

A sustained move over 34715 could trigger a labored intraday rally with potential resistance levels coming in at 34815 and 34979. The latter is a potential trigger point for an acceleration into 35252.

Overtaking 35252 will turn the E-mini Dow higher for the session.