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James Hyerczyk
E-Mini NASDAQ-100 Index

September E-mini NASDAQ-100 Index futures are trading sharply lower shortly before the cash market close. The selling is being primarily driven by a report that the U.S. intervention in Chinese interests could risk the Phase 1 trade deal.

After opening lower due to worries over a surge in coronavirus cases, the index accelerated to the downside in reaction to a report from The Wall Street Journal that said U.S. ‘meddling’ in Hong Kong, Taiwan and other matters put the trade deal at risk.

At 19:30 GMT, September E-mini NASDAQ-100 Index futures are trading 9873.75, down 223.75 or -2.32%.

Also weighing on the technology-based index was a steep drop in shares of Facebook. The social media giant was down nearly 8.0% late in the session after Verizon Communications Inc. and Unilever joined an advertising boycott that called out Facebook for not doing enough to stop hate speech on its platforms.

Daily September E-mini NASDAQ-100 Index

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum has shifted to the downside. A trade through 10296.25 will signal a resumption of the uptrend. The main trend will change to down on a move through the nearest main bottom at 9368.25.

The minor trend is down. It turned down on Friday when sellers took out 9843.50, shifting momentum to the downside.

The minor range is 9368.25 to 10296.25. Its 50% level at 9832.25 is controlling the near-term direction of the index.

The short-term range is 8841.00 to 10296.25. If the minor trend changes to down then look for the selling to possibly extend into the short-term retracement zone at 9568.50 to 9397.00.


Short-Term Outlook

The minor 50% level at 9832.25 is a potential trigger point for a break into at least 9568.50. This is followed by a support cluster at 9397.00 to 9368.25.

We’re not too worried about this break because it would be a normal 50% to 61.8% correction.

However, we are going to start focusing on the short-side if 9368.25 fails as support because this would break the bullish uptrend pattern of a series of higher-tops and higher-bottoms.

Furthermore, if short-sellers are able to take out 9368.25 with major volume then we could see an eventual break into 8841.00, followed by 8547.00 and the major 50% level at 8461.00.

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

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