E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – October 4, 2018 Forecast

The E-mini NASDAQ-100 Index futures contract is trading lower shortly before the cash market opening on Thursday. Sellers are responding to hawkish commentary from Fed Chairman Jerome Powell Wednesday which suggested the central bank would be more aggressive with rate hikes if necessary. Investors are also concerned about valuation with many of the major technology stocks at lofty levels. Furthermore, we could be seeing position-squaring and profit-taking ahead of Friday’s U.S. Non-Farm Payrolls report.

At 0954 GMT, the December E-mini NASDAQ-100 Index futures contract is trading 7515.50, down 49.25 or -0.64%.

Daily Technical Analysis

The main trend is up according to the daily swing chart. A trade through 7728.75 will signal a resumption of the uptrend. The main trend will change to down on a trade through 7422.75.

The minor trend will change to down on a move through 7473.75.

The short-term range is 7422.25 to 7728.75. Its retracement zone at 7575.50 to 7539.25 is the primary downside target. Since the main trend is up, buyers are likely to come in on the first test of this zone. The area is controlling the near-term direction of the index.

The main support zone is 7458.50 to 7396.00. This zone is controlling the longer-term direction of the market. It stopped the selling at 7420.50 and 7422.50 in September.

Daily Technical Forecast

Based on the early price action, the direction of the December E-mini NASDAQ-100 Index futures contract today is likely to be determined by trader reaction to a pair of Gann angles at 7614.25 and 7632.75.

A sustained move under 7614.25 will indicate the presence of buyers. If this move generates enough downside momentum then look for the selling to extend into 7575.50. Watch for a technical bounce on the first test of this zone. If the selling pressure continues then potential downside targets are 7539.25 and an uptrending Gann angle at 7518.25.

Crossing to the strong side of a downtrending Gann angle at 7632.75 will signal the presence of buyers. If this move creates enough upside momentum then look for a possible surge into the downtrending Gann angle at 7680.75. This angle has provided resistance this week. If taken out then look for the rally to extend into the next downtrending Gann angle at 7704.75.

Basically, look for an upside bias to develop on a sustained move over 7632.75, and for a downside bias to develop on a sustained move under 7614.25.