E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – August 14, 2017 Forecast

September E-mini Dow Jones Industrial Average futures are called higher based on the pre-market trade. Increased demand for higher risk assets is the catalyst behind the early strength. Investors may have also returned after the market tested a value area late last week.

Technical Analysis

The main trend is up according to the daily swing chart. However, momentum has been trending lower since the main top at 5995.75 on July 27.

On Friday, the index posted a potentially bullish closing price reversal bottom. This chart pattern was confirmed earlier today.

The main range is 5560.25 to 5995.75. Its retracement zone at 5778.00 to 5726.50 was tested successfully on Friday.

The new short-term range is 5995.75 to 5761.00. Its retracement zone at 5878.50 to 5906.25 is the primary upside target. Trader reaction to this zone should set the near-term tone of the market.

Aggressive counter-trend sellers are likely to come in on a test of the retracement zone. They are going to try to form a potentially bearish secondary lower top.

Buyers are going to try to drive the market through this zone in an effort to make 5761.00 a new main bottom.

Forecast

Based on the current price at 5866.75 and the earlier price action, the direction of the market is likely to be determined by trader reaction to the 50% level at 5878.50.

A sustained move over 5878.50 will indicate the presence of buyers. This could trigger an extension into 5899.75 and 5906.25.

Look for a possible acceleration to the upside if 5906.25 is taken out with conviction. This could lead to a further rally into the next downtrending angle at 5971.75. This is the last potential resistance angle before the 5995.75 main top.

The inability to overcome 5878.50 will signal the presence of sellers. The daily chart is open to the downside with potential targets coming in at 5803.75, 5784.25 and 5778.00.

If 5778.00 fails as support then look for the selling to extend into 5761.00 and 5726.50.

Watch the price action and read the order flow at 5878.50 all session. Trader reaction to this level will tell us if the buying is getting stronger.