Based on the early price action, the direction of the December E-mini NASDAQ-100 Index futures contract is likely to be determined by trader reaction to the main 50% level at 6822.75.
December E-mini NASDAQ-100 Index futures are trading higher shortly after the opening on Wednesday. Traders are attributing the recovery to a rebound in crude oil prices and optimism over US-China trade negotiations.
The main trend is down according to the daily swing chart. A trade through 6580.50 will reaffirm the downtrend. A move through 7231.00 will change the main trend to up.
The price action is also being dictated by a number of retracement levels. Most of the retracement levels are too the upside, meaning we can expected a labored rally. The way of least resistance is down, which means more volatility and wider trading ranges.
Based on the early price action, the direction of the December E-mini NASDAQ-100 Index futures contract is likely to be determined by trader reaction to the main 50% level at 6822.75.
A sustained move over 6822.75 will indicate the presence of buyers. If this generates enough upside momentum then look for a test of the short-term 50% level at 6974.50. Overtaking this level will indicate the buying is getting stronger with the next targets coming in at 7067.50 and 7154.75.
A sustained move under 6822.75 will tell a different story. This is a potential trigger point for the start of a steep break. Daily chart targets include a major Fibonacci level at 6609.00 and the main bottom at 6580.50.
James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.