E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – December 7, 2016 Forecast

December E-mini NASDAQ-100 Index futures are trading flat shortly before the cash market opening. The market is struggling with low volume and a short-term retracement zone that could determine whether the index challenges the contract high or starts another leg down.

Technical Analysis

The main trend is up according to the daily swing chart. However, momentum has been to the downside since the 4897.75 main top on November 29. Overcoming 4799.75 will shift momentum back to up.

A trade through 4701.50 will negate a closing price reversal bottom and change the main trend to down.

The main range is 4558.50 to 4897.75. Its retracement zone at 4728.00 to 4688.00 is the primary downside target. This zone stopped the break on Monday at 4701.50.

The short-term range is 4897.75 to 4701.50. Its retracement zone at 4799.75 to 4822.75 is the primary upside target. This zone is controlling the short-term direction of the market.

Forecast

Based on the current price at 4783.50 and the price action the last few days, the direction of the market today will be determined by trader reaction to the short-term 50% level at 4799.75.

Overtaking 4799.75 then crossing to the strong side of the downtrending angle at 4801.75 will signal the presence of buyers. This could drive the market into the short-term Fibonacci level at 4822.75. This is the trigger point for an acceleration into the next downtrending angle at 4849.75.

A sustained move under 4799.75 will signal the presence of sellers. This could trigger a break into the steep uptrending angle at 4765.50. The daily chart opens up to the downside under this angle with the next target coming in at 4733.50.

The major support is the combination of the retracement zone at 4728.00 to 4688.00 and the pair of uptrending angles at 4717.50 and 4710.50.

Watch the price action and read the order flow at 4799.75. Trader reaction to this price will tell us if the bulls have taken control.