E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – October 20, 2016 Forecast

December E-mini NASDAQ-100 Index futures are called steady shortly before the cash market opening. The index showed little reaction to the European Central Bank’s decision to leave interest rates unchanged. However, economists still expect the ECB to extend its bond buying program at its next meeting in December.

Last night’s presidential debate in which Democratic candidate Clinton outperformed Republican Trump had virtually no effect on the early price action. If anything, it provided support.

Earlier today, the Philly Fed Manufacturing Index came in at 9.7, beating the 5.2 estimate, but coming in below last month’s 12.8 read. Unemployment claims came in at 260K, higher than the 251K estimate.

Existing Home Sales and the Conference Board’s Leading Index are due at 1400 GMT. Traders will also react to the Treasury auction today.

Technical Analysis

The main trend is down according to the daily swing chart. The trend will turn up when 4901.50 is taken out. A trade through 4754.50 will signal a resumption of the downtrend.

The short-term range is 4754.50 to 4856.75. Its 50% level or pivot comes in at 4805.50. This is support.

The intermediate range is 4901.50 to 4754.50. Its retracement zone is 4828.00 to 4845.50. This zone is currently being tested. It is controlling the near-term direction of the market.

Forecast

Based on the current price at 4828.25, the direction of the index today is likely to be determined by trader reaction to the 50% level at 4828.00.

A sustained move over 4828.00 will indicate the presence of buyers. The initial rally could be labored because of potential resistance at 4834.50, 4837.50, 4845.50 and 4849.25.

The trigger point for a surge to the upside is 4849.25. This should get us to 4856.75 then 4869.50. This is another trigger point for a rally into 4885.50. This is the last potential resistance before the 4901.50 main top.

A sustained move under 4828.00 will signal the presence of sellers. This could lead to a steep break with targets at 4805.50 and 4794.50.

Watch the price action and read the order flow at 4828.00 today. Trader reaction to this 50% price will determine the direction of the NASDAQ-100 Index today.