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E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – Hawkish Fed Could Turn Market Lower for Week

By:
James Hyerczyk
Published: Oct 30, 2019, 05:10 UTC

Based on the early price action and the current price at 8050.25, the direction of the index on Wednesday is likely to be determined by trader reaction to last Friday’s close at 8035.75.

E-mini NASDAQ-100 Index

December E-mini NASDAQ-100 Index futures are trading slightly lower early Wednesday as investors take to the sidelines ahead of the U.S. Federal Reserve interest rate and monetary policy decisions.  The Fed is widely expected to trim interest rates by 25 basis points. This would mark its third rate cut this year. With the rate cut priced into the market, traders will be more interested in whether this is the last cut for the year.

At 04:32 GMT, December E-mini NASDAQ-100 Index futures are at 8050.25, down 5.00 or -0.06%.

Despite all the hoopla over the index hitting a record high earlier in the week, it is barely trading higher for the week, which brings up the possibility of a closing price reversal top. Some of the pressure is being caused by fear that the U.S-China trade negotiations are not progressing fast enough for a November signing of a trade deal by U.S. President Trump and Chinese President Xi Jinping.

E-mini NASDAQ-100 Index
Daily December E-mini NASDAQ-100 Index

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 8127.50 will indicate the presence of buyers. The market is in no position to change the main trend to down, but a trade under 8035.75 will turn the market lower for the week, which will be a sign of weakness.

The market is also trading on the weak side of its previous top at 8071.75, which may be an early indication that the selling is greater than the buying at current price levels.

The minor trend is also up. A trade under 7810.25 will change the minor trend to down. This will shift momentum to the downside.

The minor range is 7810.25 to 8127.50. Its 50% level or pivot at 7968.75 is the first downside target. Since the main trend is up, buyers could step in on the first test of this level. If it fails then look for the selling to possibly extend into the next pivot at 7855.25.

The main range is 7474.25 to 8127.50. If the minor trend changes to down then its retracement zone at 7800.75 to 7723.75 will become the primary downside target.

Daily Swing Chart Technical Forecast

Based on the early price action and the current price at 8050.25, the direction of the index on Wednesday is likely to be determined by trader reaction to last Friday’s close at 8035.75.

Bullish Scenario

A sustained move over 8035.75 will indicate the presence of buyers. Overcoming the previous top at 8071.75 will indicate the buying is getting stronger. If this creates enough upside momentum then look for a possible retest of the high of the week at 8127.50. This is a potential trigger point for an acceleration to the upside.

Bearish Scenario

A sustained move under 8035.75 will turn the index lower for the week, putting it in a position to post a potentially bearish weekly closing price reversal top. If the downside pressure is strong enough then look for the selling to possibly extend into the minor pivot at 7968.75. If this level can’t hold as support then look for a potential acceleration to the downside.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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