E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – Momentum has Shifted to Downside

September E-mini NASDAQ-100 Index futures are inching higher overnight, recovering from an earlier setback as traders continue to digest the Fed minutes. Based on yesterday’s technical bounce and the lack of follow-through overnight, it looks as if traders are buying into the Fed’s softer tone.

Furthermore, traders are now pricing in a 50 basis point rate hike at the central bank’s September meeting. At this time yesterday, they were looking for a 75 basis point rate hike.

At 10:01 GMT, September E-mini NASDAQ-100 Index futures are trading 13516.00, up 22.75 or +0.17%. On Wednesday, the Invesco QQQ Trust ETF (QQQ) settled at $328.49, down $3.79 or -1.14%.

In stock related news, shares of Cisco added more than 4% during extended trading Wednesday following the company’s fiscal fourth-quarter results. Cisco beat top- and bottom-line estimates, and gave better-than-expected forward guidance.

Applied Materials is scheduled to announce earnings results after the market close. The semiconductor equipment company has beaten EPS estimates 75% of the time over the last two years, but the two misses have happened in the last three quarters.

Later today, traders will get the chance to react to a slew of U.S. economic data including the Philly Fed Manufacturing Index, Weekly Unemployment Claims, Existing Home Sales and the Conference Board’s Leading Index.

The Philly Fed report could carry the most weight especially if it comes in extremely weak like the Empire State Manufacturing Index did on Monday.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, momentum has been trending lower since Tuesday’s closing price reversal top.

A trade through 13740.75 will signal a resumption of the uptrend. A move through 12072.00 will change the main trend to down.

The minor trend is also up. A trade through 12963.25 will change the minor trend to down. This will confirm the shift in momentum.

On the upside, the nearest resistance is the long-term 50% level at 13812.00, followed by the 61.8% level at 14459.25.

On the downside, the first target is the minor pivot at 13352.00. This is followed by a short-term Fibonacci level at 13082.50.

Daily Swing Chart Technical Forecast

Trader reaction to 13573.50 is likely to determine the direction of the September E-mini NASDAQ-100 Index on Thursday.

Bullish Scenario

A sustained move over 13573.50 will indicate the presence of buyers. If this creates enough upside momentum then look for a surge into 13740.75, followed by 13812.00. This is a potential trigger point for an acceleration to the upside.

Bearish Scenario

A sustained move under 13573.50 will signal the presence of sellers. The first downside target is 13352.00. If this level fails as support then look for the selling to possibly extend into 13082.50.