E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – August 25, 2016 Forecast

September E-mini NASDAQ-100 Index futures are called lower based on the pre-market trade. The bias appears to be to the downside with momentum also pointing lower after the trend changed to down on Wednesday. Profit-taking and general uncertainty ahead of Fed Chair Janet Yellen’s speech at Jackson Hole on Friday are likely behind the selling pressure. The price action also suggests that investors may be looking for value rather than continuing to chase the market higher.

Technically, the main trend is down according to the daily swing chart. It turned down on Wednesday when the index took out the last main bottom at 4772.00. The new main top is 4836.75. A trade through this level will turn the main trend back to up.

Even though the main trend turned down, the extremely low volume on the move suggests it may have been poorly placed sell stops that triggered the breakdown. In order to confirm that the trend is really turning lower, we really need to see a break under yesterday’s low at 4770.75 on rising volume. Otherwise, we could see a “whipsaw” move.

The main range is 4550.25 to 4836.75. If there is a sharp sell-off, then its retracement zone at 4693.50 will become the primary downside target.

Based on the current price at 4775.75, two key Gann angles come into play, an uptrending angle at 4782.25 and a steep downtrending angle at 4772.75.

A sustained move over 4775.75 will indicate the presence of buyers. This could create a labored rally, however, because of potential resistance angles at 4804.75, 4820.75 and 4828.75. The latter is the last potential resistance angle before the 4836.75 main top.

A sustained move under 4772.75 will signal the presence of sellers. The daily chart is open to the downside so if the selling volume begins to increase, we could see an eventual move into the main 50% level at 4693.50.

Basically, look for an upside bias on a sustained move over 4782.25 and for a downside bias to begin on a sustained move under 4772.75.