E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – December 19, 2017 Forecast

After a higher opening, March E-mini NASDAQ-100 Index futures turned lower shortly after the cash market opening. The early price action suggests a potentially bearish closing price reversal top may be forming. We’re not surprised by the price action because the index began the session in the window of time for a short-term top. Furthermore, since the current rally has been primarily driven by optimism over U.S. tax reform, we thought the news was creating the perfect “buy the rumor, sell the fact” situation.

Daily Technical Analysis

The main trend is up according to the daily swing chart. It was reaffirmed earlier in the session before breaking back under the previous close at 6535.25. A sustained move under this level will put the index in a position to form a closing price reversal top. If this occurs then we could see the start of a 2 to 3 week correction.

Daily Technical Forecast

On the upside, the nearest major target is a steep uptrending Gann angle at 6570.00. The market could continue to walk up this angle, moving up at a rate of 16 points per day from the 6250.00 main bottom, or it could cross to the stronger side of it. This would put it in an extremely bullish position.

There is room to the downside so if a closing price reversal top forms and the move starts to attract sellers, we could see a correction all the way back to the next uptrending Gann angle at 6410.00.

Based on the early price action, the direction of the E-mini NASDAQ-100 Index the rest of the session will be determined by trader reaction to yesterday’s close at 6535.25. Treat this price like a pivot the rest of the session.