E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – Is Cash/Futures Divergence First Sign of Weakness?

March E-mini NASDAQ-100 Index futures settled slightly lower on Tuesday after hitting a record high earlier in the session. The broader-based cash market NASDAQ Composite hit a record high while also posting a record closing high. Traders should make note of this mild divergence because it could be an indication the buying is weakening, or the selling pressure is strengthening.

On Tuesday, March E-mini NASDAQ-100 Index futures closed at 9527.25, down 0.25%. In addition to closing lower after hitting an all-time high, the index also closed below the mid-point of the trading session, but above the opening.

Daily Swing Chart Technical Analyst

The main trend is up according to the daily swing chart. A trade through 9609.50 will signal a resumption of the uptrend. The main trend will change to down on a move through the last swing bottom at 8966.00.

The minor trend is also up. A trade through 9330.75 will change the minor trend to down. This will shift momentum to the downside.

The minor range is 9330.75 to 9609.50. Its 50% level or pivot at 9470.00 is the first downside target. Look for buyers on the first test of this level.

The main range is 8966.00 to 9609.50. Its retracement zone comes in at 9287.75 to 9211.75. This is also a value area.

Daily Swing Chart Technical Forecast

The direction of the March E-mini NASDAQ-100 Index on Wednesday is likely to be determined by trader reaction to yesterday’s low at 9501.25.

Bullish Scenario

Holding above 9501.25 will indicate the presence of buyers. The first minor upside target is a pivot at 9555.50. Overtaking this level could drive the index into 9609.50. This is a potential trigger point for another spike to the upside.

Bearish Scenario

A sustained move under 9501.25 will signal the presence of sellers. This could trigger a break into the minor pivot at 9470.00. Watch for buyers on the first test of this level.

The pivot at 9470.00 is also a potential trigger point for an acceleration to the downside with the next targets the minor bottom at 9330.75 and the short-term 50% level at 9287.75.