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James Hyerczyk
S&P 500

September E-mini NASDAQ-100 Index futures are edging lower early Monday as investors continue to express concerns over a second-wave of coronavirus infections and its potential impact on the global economic recovery.

Investors don’t expect a second-wave to shut down the global economy like it did in March, but they do expect the recovery to slow, dampening the chances of a V-shaped recovery. It’s this image that drove the index to a record high. The greater the expectations of a change in the pattern, the more investors will lighten up their long positions.

The market is down only four days from its all-time high. There has been no panic, just normal long liquidation so far.

At 04:11 GMT, September E-mini NASDAQ-100 Index futures are trading 9836.25, down 29.25 or -0.30%.

Daily September E-mini NASDAQ-100 Index

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum is trending lower. A trade through 10296.25 will signal a resumption of the uptrend. A move through 9368.25 will change the main trend to down.

The minor trend is down. It turned down early Monday when sellers took out the last minor bottom at 9843.50. This move confirmed the shift in momentum. A trade through 10120.50 will change the minor trend to up.

The short-term range is 9368.25 to 10296.25. Its 50% level or pivot at 9332.25 could control the price action the rest of the session. Keep an eye on this level.

The intermediate range is 8841.00 to 10296.25. Its retracement zone at 9568.50 to 9397.00 is the next major downside target. Since the main trend is up, buyers could come in on a test of this zone. They are also going to be defending the trend since this is the last potential support zone before the 9368.25 main bottom.

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Early Outlook

Based on the early price action and the current price at 9836.25, the direction of the September E-mini NASDAQ-100 Index the rest of the session on Monday is likely to be determined by trader reaction to the pivot at 9832.25.

Bullish Scenario

A sustained move over 9832.25 will indicate the presence of buyers. If this creates enough upside momentum then look for the intraday rally to possibly extend into 10038.25 to 10120.50.

Traders should watch the reaction at 10038.25 to 10120.50. A secondary lower top could form if sellers come in big to defend this area.

Bearish Scenario

A sustained move under 9832.25 will signal the presence of sellers. If this generates enough downside momentum then look for a potential acceleration to the downside with the next target the 50% level at 9568.50, followed by the 61.8% level at 9397.00 and the main bottom at 9368.25.

For a look at all of today’s economic events, check out our economic calendar.

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