E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – Higher-High, Lower-Close Will Lead to 2 to 3 Week Correction

March E-mini NASDAQ-100 Index futures hit a record high last week, continuing this leg of the rally which began the week-ending December 8. There is no resistance at current price levels so chart patterns will take on added importance. Additionally, it doesn’t make sense to try to short the market until it stops going up. Sell weakness, buy strength, not the other way around. Who do you think is feeding this bull market anyway?

Weekly Swing Chart Analysis

The main trend is up according to the weekly swing chart. A trade through 7034.50 will signal a resumption of the uptrend.

This week begins with the index in the window of time for a closing price reversal top, so there is always the possibility of a closing price reversal top. This will not mean the trend is changing to down, but it could lead to a 2 to 3 week correction, something that may be necessary to alleviate a possible overbought condition.

If the index stays inside its short-term range of 6250.00 to 7034.50, then its retracement zone at 6642.25 to 6549.75 will become the primary downside target.

Weekly Swing Chart Forecast

Based on the current chart pattern, the direction of the market this week will be determined by trader reaction to last week’s high at 7034.50 and last week’s close at 7030.25.

Taking out 7034.50 and sustaining the rally will signal the presence of strong buyers.

Taking out 7034.50 and breaking back under 7030.25 will indicate the presence of sellers.

Taking out 7034.50 and closing below 7030.25 will form a potentially bearish closing price reversal top. This will be a strong indication that the selling is greater than the buying at current price levels.