E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Trader Reaction to 29219 Sets the Tone

March E-mini Dow Jones Industrial Average futures are called lower based on early session weakness as traders continue to assess the damage to China’s economy from the coronavirus outbreak. The price action suggests traders are starting to worry that any weakness in China is likely to have a negative impact on the global economy as U.S. investors downplay Friday’s better-than-expected U.S. jobs report.

At 14:04 GMT, March E-mini Dow Jones Industrial Average futures are trading 28950, down 94 or -0.33%.

Traders could also be squaring positions as earnings season winds down ahead of Federal Reserve Chairman Jerome Powell’s testimony before Congress on Tuesday and Wednesday.

Daily Technical Analysis

The main trend is up according to the daily swing chart. A trade through 29475 will signal a resumption of the uptrend. The main trend will change to down on a move through 28105.

The short-term range is 28105 to 29475. Its retracement zone at 29790 to 28628 is the next likely target. Since the main trend is up, buyers could show up on the first test of this area.

The intermediate retracement zone comes in at 28330 to 28086.

Daily Technical Forecast

Based on the early price action and the current price at 28950, the direction of the March E-mini Dow Jones Industrial Average futures contract the rest of the session on Monday is likely to be determined by trader reaction to the steep uptrending Gann angle at 28873.

Bullish Scenario

A sustained move over 28873 will indicate the presence of buyers. If this move creates enough upside momentum then look for a test of the downtrending Gann angle at 29219. This is followed by a series of downtrending Gann angles at 29347, 29411 and 29443. The latter is the last potential resistance angle before the 29475 main top.

Bearish Scenario

A sustained move under 28873 will signal the presence of sellers. This could trigger a break into the short-term 50% level at 28790. Watch for buyers on the first test of this level.

If 28790 fails to hold then look for the selling to possibly extend into the short-term Fibonacci level at 28628.

The selling is likely to extend into 28489 if the Fib level at 28628 fails to hold as support.