E-mini NASDAQ-100 Index (NQ) Futures Analysis – June 1, 2013

The June E-mini NASDAQ-100 is rebounding this morning after an early session setback. The surging Japanese Yen put downside pressure on the global stock indices, leading some to believe the trend would continue all session.

The index was trading lower until the release of last month’s U.S. Retail Sales results and last week’s unemployment claims. Retail sales climbed 0.6 percent in May, according to the Commerce Department, beating expectations for a gain of 0.5 percent.

Weekly Jobless Claims declined 12,000 to a seasonally adjusted 334,000 last week. This was the lowest level in nearly five years, beating expectations of a decline of only 1,000. Stock traders appeared to like these numbers since they represented an improving economy.

Despite the solid U.S. economic numbers, however, traders are still likely to react to the activity in Japan and the strong possibility that the Federal Reserve will begin tapering its bond-buying program as early as next week’s Open Market Committee Meeting on June 19. These concerns should keep a lid on a rally.

The main trend turned down on the daily chart when the market took out the last swing bottom at 2910.50. The new main top is 3004.00.

Today’s pre-market turnaround occurred slightly above the major 50% price level at 2888.75 and a long-term uptrending Gann angle at 2880.00. A failure to hold both of these levels could drive the market into the Fibonacci level at 2849.75.

On the upside, look for early resistance at 2933.00. A sustained move through this angle could trigger a full retracement to 2950.75.

Even though traders are reacting to the friendly U.S. economic numbers, chances are bearish traders are sitting up above waiting for another opportunity to refresh their short positions.