E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – October 2, 2014 Forecast

December E-mini NASDAQ-100 Index futures sold-off sharply on Wednesday, reaffirming the main downtrend. The close near the low suggests more downside pressure today, however, the market is currently testing a major 50% level and a major uptrending angle.

Counter-trend buyers may use this area as a reason to get long and short-sellers may decide to begin booking profits. So be prepared for a technical bounce if there is no follow-through selling. In addition, the index is in the window of time to form a potentially bullish closing price reversal chart pattern.

The main range is 3819.75 to 4118.75. The retracement zone created by this range is 3969.25 to 3934.00. The upper, or 50% level was tested successfully on Wednesday, producing a slight technical bounce. The market also tested a long-term uptrending angle from the 3819.75 bottom. This angle is at 3971.75 today.

If sellers drive the market through the 50% level at 3969.25 then look for a break into the Fibonacci level at 3934.00. If this level fails then the angle at 3895.75 is the next target.

A downtrending angle comes in at 3974.75. The close at 3982.50 has put the index on the bullish side of this angle. Crossing below it will be a sign of weakness.

A sustained move over 3974.75 could encourage short-covering. The first potential upside target is a downtrending angle at 4046.75.

The tone of the market today will be determined first by trader reaction to 3974.75 then 3969.25.