E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – July 13, 2017 Forecast

September E-mini NASDAQ-100 Index futures are trading higher shortly after the opening. The markets are thin and very reactive. This explains the exaggerated move on Wednesday to Fed Chair Janet Yellen’s comments about muted inflation. She basically reiterated what the Fed said in its monetary policy statement and minutes and what Lael Brainard said earlier in the week.

Investors are also preparing for the start of earnings season and Friday’s major U.S. consumer inflation report.

Technical Analysis

The trend is down according to the daily swing chart. The trend will turn to up on a move through 5852.00. If this gets investors excited then the rally could eventually carry into the all-time high at 5907.50.

The trend may be down, but momentum has been trending higher since the 5560.25 main bottom on July 5.

The short-term range is 5907.50 to 5560.25. Its retracement zone is 5733.75 to 5774.75.

Forecast

Now that the index has crossed to the strong side of the retracement zone, I expect momentum to pick up with the next targets at 5852.00 and 5907.50.

Falling back below 5774.75 will be the first sign of selling pressure. If it’s strong enough then look for the move to extend into 5733.75. Crossing to the weak side of this price could trigger an acceleration to the downside.

I’d take any reaction to Yellen with a grain of salt because she is not talking about making any major changes to monetary policy. In my opinion, she is just putting a voice to words that the Fed has been printing in its monetary policy statements all year.

I wouldn’t be surprised by a lower close today because of position-squaring ahead of the earnings reports on Friday and the U.S. CPI report.