E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – December 19, 2018 Forecast

March E-mini NASDAQ-100 index futures are trading higher shortly before the cash market opening. The market is trading inside yesterday’s range which suggests investor indecision and impending volatility. The indecision is being fueled by worries over the Fed’s interest rate and monetary policy decisions due to be released at 1900 GMT. The Fed is widely expected to raise its benchmark rate 25 basis points, but stock market investors are more concerned about what the Fed will have to say about the pace of future rate hikes. If Fed Chair Powell comes across as a little more dovish than expected, this could jump start a rally.

At 1238 GMT, March E-mini NASDAQ-100 Index futures are trading 6540.75, up 57.00 or +0.88%.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 6897.00 will change the main trend to up. A move through 6423.25 will signal a resumption of the downtrend with a pair of bottoms at 6399.25 and 6383.75 the next likely targets.

Due to the prolonged move down in terms of price and time, traders should also prepare for a possible closing price reversal bottom. We expect to see a volatile two-sided trade after the Fed announcements and remarks by Fed Chair Jerome Powell.

The short-term range is 6897.00 to 6423.25. Its retracement zone at 6660.25 to 6716.00 is the first upside target.

The main range is 7169.00 to 6423.25. Its retracement zone at 6796.25 to 6884.25 is the next potential upside target.

Daily Swing Chart Technical Forecast

Based on the price action the last two sessions, the direction of the March E-mini NASDAQ-100 Index on Wednesday is likely to be determined by trader reaction to this week’s low at 6423.25.

Bullish Scenario

A sustained move over 6423.25 will indicate the presence of buyers. If this creates enough upside momentum then look for a rally into 6660.25 to 6716.00. Look for sellers on the first test of this zone.

Taking out 6716.00 will indicate the buying is getting stronger with the next upside target the main 50% level at 6796.25, the main Fibonacci level at 25104 and the main top at 6897.00.

Bearish Scenario

A sustained move under 6423.25 will signal the presence of sellers. This could trigger an acceleration to the downside with the first targets at 6399.25 and 6383.25. The selling could extend to 6266.25. This is a potential trigger point for an acceleration into 5880.50.

Closing Price Reversal Bottom Pattern

Taking out 6423.25 then recapturing yesterday’s close at 6483.75 will indicate the buying is greater than the selling at current price levels. This could trigger a strong intraday rally. A higher close will form a daily closing price reversal bottom. This could fuel the start of a 2 to 3 day counter-trend rally.