E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – August 11, 2017 Forecast

September E-mini NASDAQ-100 Index futures are trading lower during the pre-market session. Investors are still expressing concerns over the U.S.-North Korea situation. North Korea’s threat to bomb Guam is still out there as well as President Trump’s promise to retaliate. Diplomatic efforts are probably taking place to diffuse the situation, but until there is fresh news, investors are likely to continue to take protection.

The U.S. will release the latest consumer inflation data today. Both CPI and Core CPI are expected to come in at 0.2%. A lower number will theoretically be bullish for stocks because it will mean rates will remain low for a longer-time than expected. This could trigger a technical bounce.

Investors are going to have to decide to trade the CPI report which will be a “known”, or trade the North Korean situation which is an “unknown”. If worries about a week-end attack gain traction then we could see a sell-off into the close.

Technical Analysis

The main trend is up according to the daily swing chart. However, momentum is trending lower.

The main range is 5560.25 to 5995.75. Its retracement zone is 5778.00 to 5726.50. This zone was the primary objective of the closing price reversal chart pattern. The index is currently testing this zone.

Since the main trend is up, we could see buyers show up on a test of the retracement zone. This could produce a technical bounce. If the zone fails then we could see an acceleration to the downside.

Forecast

Based on the early price action, the direction of the index today is going to be determined by trader reaction to the resistance cluster at 5776.25 to 5778.00.

A sustained move under 5776.25 will signal the presence of sellers. This could drive the market into the Fibonacci level at 5726.50. Crossing to the weak side of the Fib could trigger an acceleration into a pair of uptrending angles at 5668.25 and 5614.25. The latter is the last potential support angle before the 5560.25 main bottom.

Overtaking 5778.00 will signal the presence of buyers. The next target is a downtrending angle at 5819.75. The daily chart is wide open over this angle with the next major target angle coming in at 5907.75.

We think an upside bias can develop on a sustained move over 5778.00, or the downside momentum will continue on a sustained move under 5776.25.