E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Trader Reaction to 31292 Sets the Tone

March E-mini Dow Jones Industrial Average futures are inching lower early Friday, but still holding on to this week’s small gain. Overnight volume is light which reflects little interest from Asia where China and Japan are celebrating their Lunar holiday.

The blue chip index is being supported by strong overnight gains in Dow Component Disney. Shares of Disney jumped more than 2% in extended trading after the company reported strong growth in paid streaming subscribers and crushed expectations in its earnings report for its fiscal first quarter of 2021.

At 06:31 GMT, March E-mini Dow Jones Industrial Average futures are trading 31319, down 40 or -0.13%.

Later today at 15:00 GMT, investors will get the opportunity to react to reports on Preliminary University of Michigan Consumer Sentiment and Preliminary University of Michigan Inflation Expectations. Consumer Confidence is expected to come in at 80.80, up from 79.00. The Fed is also expected to release its monetary policy report.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 31465 will signal a resumption of the uptrend. The main trend will change to down on a trade through 29552. This is highly unlikely, but due to the prolonged rally in terms of price and time, the index is inside the window of time for a potentially bearish closing price reversal top.

The minor trend is also up. A trade through 31119 will change the minor trend to down. This will shift momentum to the downside.

The minor range is 31119 to 31465. The index is currently straddling its 50% level at 31292.

The next minor range is 29552 to 31465. If the minor trend changes to down then its 50% level at 30509 will become the primary downside target.

The short-term retracement zone at 30392 to 30138 is the primary downside target zone support.

Daily Swing Chart Technical Forecast

The early trade suggests the direction of the March E-mini Dow Jones Industrial Average on Friday is going to be determined by trader reaction to 31292.

Bullish Scenario

A sustained move over 31292 will signal the presence of buyers. Taking out 31465 will signal a resumption of the uptrend. This is also a potential trigger point for an acceleration to the upside.

Bearish Scenario

A sustained move under 31292 will indicate the presence of sellers. The first downside target is the minor bottom at 31119.

Taking out this minor bottom will change the minor trend to down. If this creates enough downside momentum then look for an eventual break into at least 30509.

Side Notes

Taking out 31465 then closing below 31359 will form a potentially bearish closing price reversal top. If confirmed then look for a possible 2 to 3 day correction with 30509 the minimum downside target price.