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James Hyerczyk

December E-mini NASDAQ-100 Index futures are edging lower late in the session on Monday after giving back all of its earlier gains. Uncertainty is the theme driving the price action. There’s uncertainty ahead of Tuesday’s presidential election and uncertainty over whether the rapidly spreading number of coronavirus cases will eventually derail the current economic recovery.

At 20:20 GMT, December E-mini NASDAQ-100 Index futures are trading 11044.75, down 1.50 or -0.01%.

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The whip-saw price action was hardly a surprise to some who largely expected short-term volatility and the likelihood of major long-term policy shifts related to taxes, government spending, trade and regulation depending on whether Republican President Donald Trump or his Democratic challenger Joe Biden wins the White House race.

Biden is ahead in national opinion polls, but races are tight in battleground states that could tip the election to Trump. Analysts said the outcome most likely to shake equity markets in the near term would be no immediate winner on Tuesday night.

Daily December E-mini NASDAQ-100 Index

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The downtrend was confirmed on Monday when sellers took out Friday’s low. The next downside target is a main bottom at 10660.25. A trade through this bottom will reaffirm the downtrend.

The main trend will change to up on a move through 12249.00. This is highly unlikely, but since the market is down 14 sessions from this top, the index is inside the window of time for a potentially bullish closing price reversal bottom.

The minor trend is also down. A trade through 12022.00 will change the minor trend to up. This will shift momentum to the upside.

The main range is 9390.50 to 12444.75. Its retracement zone at 10917.50 to 10557.25 is potential support. It stopped the selling on September 24 at 10660.25.


Short-Term Outlook

The next major move in the December E-mini NASDAQ-100 Index will likely be determined by trader reaction to the retracement zone at 10917.50 to 10557.25.

A close below the upper or 50% level at 10917.50 will indicate the presence of sellers. This could put pressure on the index early Tuesday. The lower or Fibonacci level at 10557.25 is a potential trigger point for an acceleration to the downside. The daily chart indicates there is plenty of room to the downside with the June 15 main bottom at 9390.50 the next major target.

A close over Friday’s close at 11046.25 will signal the presence of buyers. If confirmed on Tuesday, this could trigger the start of a 2-3 day counter-trend rally.

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

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