E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – October 31, 2014 Forecast

December E-mini NASDAQ-100 Index futures blew through the contract high at 4118.75 overnight after the Bank of Japan announced fresh stimulus.

Traders shouldn’t worry about resistance today, but the main concern should be about the chart pattern. Since the market is currently in the midst of a prolonged move up in terms of price and time, the only thing that bullish investors should fear is the potentially bearish closing price reversal top on the intraday or daily charts. Not only does time influence this pattern, but also the tendency for a top to occur after a vertical move.

Since old tops tend to become new bottoms then look for support at 4118.75. If it holds then this will signal that buyers are coming in to defend the trend. If it fails then this will be an indication that the spike to the upside was triggered by short-covering rather than aggressive buying.

If the market does reverse and break sharply to the downside, the nearest support is a steep uptrending angle at 4036.00.

The tone of the market today will be determined by trader reaction to 4118.75.