E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Trader Reaction to 31391 Sets the Tone

March E-mini Dow Jones Industrial Average futures are down shortly before the mid-session on Thursday. The selling started early after Dow component Walmart issued a gloomy forecast and accelerated a little as investors were discouraged by a worse-than-expected jobless claims report.

At 16:03 GMT, March E-mini Dow Jones Industrial Average futures are trading 31321, down 228 or -0.72%.

Dow component Walmart shares dropped nearly 6% after its fourth quarter earnings fell short of Wall Street estimates. The big box retailer also sees sales growth slowing this year as the pandemic momentum ebbs.

Also weighing on the Dow were shares of another component, Apple Inc, which shed 2.4%. The tech giant is down 4.6% so far this week as investors take some profits in the Big Tech stocks that have led the market to record highs this year.

In economic news, first time filings for unemployment insurance totaled 861,000 last week, the highest level in a month and above the Dow Jones estimate of 773,000, the Labor Department reported Thursday.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, but momentum has shifted to the downside. A trade through 31662 will signal a resumption of the uptrend. The main trend will change to down on a move through 29552.

The minor trend is down. This is controlling the momentum. The minor trend changed to down on a trade through 31269 earlier today. The new minor top is 31632. A trade through this level will change the minor trend back up and shift momentum in the other direction.

The minor range is 31119 to 31662. The Dow is currently trading on the weak side of its pivot at 31391.

The short-term range is 29552 to 31662. Its 50% level at 30607 is the next potential downside target price.

Daily Swing Chart Technical Forecast

The direction of the March E-mini Dow into the close on Thursday is likely to be determined by trader reaction to the pivot at 31391.

Bearish Scenario

A sustained move under 31391 will indicate the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into the minor bottom at 31119.

The daily chart indicates there is plenty of room to the downside under 31119 so watch for the start of an acceleration if this price is violated. Heavy selling pressure could take the Dow to 30607 rather quickly.

Bullish Scenario

A sustained move over 31391 will signal the presence of buyers. The first target is a pivot at 31445. Overtaking this level could create the upside momentum needed to challenge the record high at 31662.

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