E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – December 8, 2016 Forecast

December E-mini NASDAQ-100 Index futures are trading slightly higher shortly before the release of the European Central Bank’s monetary policy announcement. Yesterday’s rally was fueled by the thought that the central bank will provide additional stimulus. If they meet or exceed expectations then we could rally sharply higher again today.

Since the NASDAQ-100 Index is lagging behind the other two major indexes, if the ECB disappoints, then it could feel the brunt of the selling pressure.

Technical Analysis

The main trend is up according to the daily swing chart. A trade through 4897.75 will signal a resumption of the uptrend. The trend will change to down on a trade through 4701.50.

The short-term range is 4897.75 to 4701.50. Its retracement zone is 4799.50 to 4822.75. Holding above this zone will give the market an upside bias. Falling below this zone will mean momentum has shifted to the downside.

The main range is 4558.50 to 4897.75. Its retracement zone at 4728.00 to 4688.00 is the primary downside target.

Forecast

Based on the current price at 4845.75, the direction of the index today is likely to be determined by trader reaction to the downtrending angle at 4841.75.

A sustained move over 4841.75 will indicate the presence of buyers. The rally could be labored because of potential resistance at 4869.75 and 4883.75. The latter is the last potential resistance angle before the 4897.75 main top. A breakout over this top could generate enough upside momentum to challenge the main top at 4919.50.

A sustained move under 4841.75 will signal the presence of sellers. The next targets are 4822.75 and a price cluster at 4799.50 to 4797.50.

The daily chart begins to open up to the downside under 4797.50 with the next major target angle coming in at 4749.75. This is followed by an uptrending angle at 4725.00.

Watch the price action and read the order flow at 4841.75. Trader reaction to this angle will tell us if the buying is getting stronger or if the selling pressure is increasing.