Next Big Challenge for E-Mini Dow Traders is 36177 – 36331 Retracement Zone

March E-mini Dow Jones Industrial Average futures are lower for the session late Monday even after clawing back most of its earlier losses. The blue chip average was dragged off its intraday low by a strong performance in the technology-driven NASDAQ Composite, which snapped a four-day losing streak.

The market has been under pressure since late last week after the benchmark 10-year Treasury yield briefly traded above 1.8% on Monday morning after ending the year near 1.51%. The rebound from its early session low came about after the 10-year Treasury yield dipped back below 1.8% at the mid-session.

At 21:18 GMT, March E-mini Dow Jones Industrial Average futures are trading 35936, down 171 or -0.47%. This is up from a low of 35521.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 36832 will negate a closing price reversal and signal a resumption of the uptrend. A move through the intraday low at 35521 will signal a resumption of the downtrend.

The short-term range is 34547 to 36832. Late in the session, the E-mini Dow is trading on the strong side of its 50% level at 35690, making it support.

The intermediate range is 33860 to 36832. Its 50% level at 35346 is another potential support area.

The main range is 33300 to 36832. Its retracement zone at 35066 to 34649 is controlling the near-term direction of the E-mini Dow.

The new minor range is 36832 to 35521. Its retracement zone at 36177 to 36331 is the next potential upside target and resistance. Since the main trend is down, sellers are likely to come in on a test of this zone.

Short-Term Outlook

The short-term direction of the March E-mini Dow will be determined by trader reaction to 36177 to 36351.

Look for the downside bias to continue on a sustained move under 36177. If this creates enough downside momentum then look for the selling to continue into 35690, followed by 3551 and 35346.

If 35346 is taken out then look for a test of 35066 to 34649. Look for counter-trend buyers on the first test of this area.

Taking out 36331 will signal the presence of buyers. If this move generates enough upside momentum then look for a possible surge into 36832.

Side Notes

Since the main trend is down, we’re looking for sellers to come in on a test of 36177 to 36331. They are going to try to form a potentially bearish secondary lower top.