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James Hyerczyk
E-mini NASDAQ-100 Index
E-mini NASDAQ-100 Index

September E-mini NASDAQ-100 Index futures are trading higher shortly after the cash market opening. There is no identifiable resistance at current levels and if anyone tells you there is then they’re just making it up. I’ve always wondered how a market can have resistance at a new all-time high since it hasn’t been there before.

Some aggressive counter-trend traders are going to try to sell projection levels. However, they’re likely to continue to feed the bull if the upside momentum remains strong. If you feel inclined to pick a top then the best way to do this is to let the index stop rallying then sell on the way down. Since you’ll be going against the trend, use tight trailing stops.

The main trend is up according to the daily swing chart. The uptrend was reaffirmed earlier today when buyers took out the previous top at 7437.75.

The first sign of weakness today will be a pullback below the previous top at 7437.75. This will indicate that today’s earlier rally was fueled by buy stops rather than aggressive buying.

The next sign of weakness will be a break under yesterday’s close at 7430.50. This move will put the index in a position to post a potentially bearish closing price reversal top on the daily chart.

The third sign of selling pressure will be a move through 7311.50. This price action will change the main trend to down. The next target under this price is 7292.50. Taking out this bottom will indicate the selling is getting stronger. This could eventually lead to a test of about 7211.00 to 7151.00.

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