E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – October 1, 2013 Forecast

Look for the December E-mini NASDAQ-100 futures contract to open steady to better this morning after Monday’s massive turnaround. With the market hovering around the contract high, it looks as if investors aren’t too worried about the government shutdown. It looks as if investors are pricing in a short-term crisis, however, if it looks as if the ordeal is going to become a longer-term event then look out to the downside.

Technically, the main trend is up on the daily chart. Based on the overnight follow-through to the upside, a new minor bottom has formed at 3178.25. The new short-term range is 3241.50 to 3178.25 with a 3210.00 to 3217.50 retracement zone. Overnight, the market took out this zone, creating a new higher support zone. A break back under 3210.00 will be the first sign of weakness today.

The first resistance angle was tested overnight at 3227.50. A sustained move through this angle could lead to an eventual test of the contract high at 3241.50.

At this time, the news and the upside potential are two unknowns. The downside, however, clearly shows the potential for an eventual correction back to 3145.25 to 3122.50.

Since today is likely to be a news driven day, investors should brace for volatility. If a solution to the shutdown is reached then look for stocks to take off to the upside. If an agreement isn’t reached by the end of the day or if it is determined that both sides are still far apart then look for the start of a substantial sell-off.