March E-mini Dow Jones Industrial Average futures are trading lower shortly after the cash market opening. There was very little follow-through to the upside following yesterday’s massive rally. This indicates that the move was fueled by short-covering rather than aggressive buying. I didn’t think investors would chase this market higher today, but I do think we’re going to see a few counter-trend dibbles on a pullback into a short-term retracement zone.
At 1510 GMT, March E-mini Dow Jones Industrial Average futures are at 22426, down 472 or -2.07%.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. However, yesterday’s closing price reversal bottom suggests we may be close to a shift in momentum to the upside.
A trade through today’s intraday high at 23008 will indicate the buying is getting stronger. The main trend will change to up on a move through the swing top at 24860. A move through 21452 will negate the closing price reversal bottom and signal a resumption of the downtrend.
The main range is 24860 to 21452. Its retracement zone at 23156 to 23558 is the primary upside target. Since the main trend is down, sellers are likely to try to form a secondary lower top on a test of this area.
The minor range is 21452 to 23008. Its retracement zone at 22230 to 22046 is the primary downside target. Inside this range is the major 50% level at 22151. Watch for aggressive counter-trend buyers to come in on a test of this area. They are going to try to form a secondary higher bottom.
Daily Swing Chart Technical Forecast
Look for downside momentum as long as the market remains under today’s intraday high at 23008. If the selling pressure continues then look for a break into a series of retracement levels at 22230, 22151 and 22046. Watch for aggressive counter-trend buyers on a test of these levels. If they hold as support then we could see a reversal to the upside.
If 22046 is taken out with conviction then look for a potential acceleration to the downside with the next target yesterday’s main bottom at 21452.
Under 21452 is a series of main bottoms. The first is the July 11, 2017 main bottom at 21283. The second is the June 29, 2017 main bottom at 21195 and the third is the June 7, 2017 main bottom at 21119.