E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – May 31, 2016 Forecast

June E-mini NASDAQ-100 Index futures finished higher on Friday and in a position to continue the rally on Tuesday when the market reopens, following yesterday’s U.S. bank holiday.

The main trend is up according to the daily swing chart. The main trend is not in a position to turn lower, but it is in the window of time to form a potentially bearish closing price reversal top. This could lead to the start of a 2 to 3 day break equal to at least 50% of the last rally.

Besides the time factor, the odds of a reversal taking place will increase as we approach the major top at 4584.50 and if investors decide to lighten up their positions ahead of Friday’s U.S. Non-Farm Payrolls report.

The main range is 4584.50 to 4271.00. Its retracement zone is 4427.75 to 4464.75. Three closes over this zone confirm the strength of the uptrend. The 61.8% and 50% levels are now support.

Based on the close at 4510.00, the direction of the market is likely to be determined by trader reaction to the uptrending angle at 4504.75 and a resistance cluster at 4526.50 to 4527.00.

Overtaking 4527.00 will put the index on the strong side of an uptrending angle and in a bullish position to continue the rally into the next downtrending angle at 4555.50. This is the last potential downtrending angle before the 4584.50 main top.

The inability to overtake 4527.00 or sustain a rally over 4526.50 will indicate the presence of sellers. The real selling pressure will take place on a move through the steep uptrending angle at 4504.75. This could trigger a steep break into the major Fib level at 4464.75.

Look for another acceleration to the downside if 4464.75 fails with the next major target the 50% level at 4427.75.

Essentially, we want to look for an upside bias on a sustained move over 4527.00 and a downside bias on a sustained move under 4504.75.