E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Fed Minutes Could Produce Volatile Reaction

March E-mini Dow Jones Industrial Average futures are edging lower early Wednesday. Volume and volatility are below average. We could be looking at position squaring ahead of the release of the January U.S. Federal Reserve Monetary Policy Meeting Minutes at 19:00 GMT.

Yesterday’s trade was relatively lackluster with uncertainty over U.S.-China trade relations building. However, positive comments from President Trump late in the session helped fuel a short-covering rally, which turned the index positive into the close.

At 05:37 GMT, March E-mini Dow Jones Industrial Average futures are trading 25857, down 26 or -0.10%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 25957 will signal a resumption of the uptrend. A move through 25275 will change the main trend to down.

Daily Swing Chart Technical Forecast

The direction of the March E-mini Dow Jones Industrial Average on Wednesday is likely to be determined by trader reaction to yesterday’s high at 25957.

Bullish Scenario

A sustained move over 25957 will indicate the presence of buyers. If this creates enough upside momentum then look for a potential acceleration of the rally into the December 3 main top at 26110. We could see sellers on the first test of this level, however, taking it out could trigger another acceleration into the November 8 main top at 26300. The daily chart indicates there is plenty of room to the upside over this level with the October 3 main top at 27015 the next major upside target.

Bearish Scenario

The inability to overcome 25957 will indicate the lack of buyers. A sustained move under this level will signal the presence of sellers. The next major downside target is the main bottom at 25275. Taking out this level will change the main trend to down.

Closing Price Reversal Top Scenario

Because of the release of the Fed minutes, traders have to be on the lookout for a potentially bearish closing price reversal top. This report can produce volatile two-sided trading.

Taking out 25957 then turning lower for the session will put the Dow in a position to post a closing price reversal top. This may not change the trend, but it could lead to a 2 to 3 day counter-trend break.