E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – New Record High with Momentum Shift Biggest Concern

March E-mini NASDAQ-100 Index futures are trading higher in the pre-market session on Friday, hitting a record high in the process. The early strength has put the index in a position to post its best weekly performance since November. The strong gains indicate that investors have already forgot about last week’s sharp losses as the speculative trading frenzy dissipated.

At 10:46 GMT, March E-mini NASDAQ-100 Index futures are trading 13597.00, up 49.50 or +0.37%.

Wall Street is in the middle of a solid earnings season. Of the 184 companies in the S&P 500 that have reported earnings to date, 84.2% topped analyst expectations, according to Refinitiv.

In other news, the Labor Department will release its jobs report for January at 13:30 GMT. Economists expect 50,000 payrolls added last month, after a decline of 140,000 in December, according to Dow Jones. The unemployment rate is expected to stay at 6.7%.

There have been signs of improvement in the labor market recovery. Thursday’s weekly jobless claims data showed 779,000 first time filers, the lowest since November 28 and below the 830,000 expected by economists.

Also, a month after reporting the first loss since April, the employment picture bounced back in January as companies added 174,000 new jobs, according to a report Wednesday from payroll processing firm ADP.

The gain beat the 50,000 estimate from economists surveyed by Dow Jones and improved on the 78,000 December decline, a number that was revised from the initially reported drop of 123,000.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was reaffirmed earlier in the session when buyers took out the previous main top at 13599.75. The main trend will change to down on a trade through 12727.25.

The minor trend is also up. A trade through 13345.25 will change the minor trend to down. This will also shift momentum to the downside.

Daily Swing Chart Technical Forecast

With the index posting a new record high and facing no visible resistance, the only fear for investors should be a closing price reversal top. Therefore, the direction of the March E-mini NASDAQ-100 Index on Friday will be determined by trader reaction to Thursday’s close at 13547.50.

Bullish Scenario

A sustained move over 13547.50 will indicate the presence of buyers. Taking out the pre-market high at 13618.75 will indicate the buying is getting stronger.

Bearish Scenario

A sustained move under 13547.50 will signal the presence of sellers. If this move is able to generate enough downside momentum then look for sellers to go after the minor bottom at 13345.25.

A failure to hold 13345.25 will shift momentum to the downside. This could trigger the start of a steep break.

Side Notes

A close under 13547.50 will form a potentially bearish closing price reversal top. If confirmed, this could trigger the start of a 2 to 3 day correction equal to at least 50% – 61.8% of the rally from 12727.25.