E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – Reaction to 16157.75 Sets Early Tone on Tuesday

March E-mini NASDAQ-100 Index futures are trading sharply lower late in the session on Monday. With the market testing the low of the session into the close, traders are expecting follow-through selling early Tuesday. Fueling the downside pressure is worries about the Omicron coronavirus variant ahead of a Federal Reserve meeting on Wednesday.

At 21:25 GMT, March E-mini NASDAQ-100 Index futures are trading 16080.75, down 250.75 or -1.54%. The Invesco QQQ Trust Series 1 ETF settled at $392.25, down $5.76 or -1.45%.

Investors expect an increasingly hawkish tone out of the Federal Reserve’s two-day meeting that wraps up Wednesday. The Fed will release its monetary policy statement at 19:00 GMT. The U.S. central bank is expected to signal a faster wind-down of asset purchases, which could move it closer to its first interest rate hike.

In stock related news, Apple Inc dipped 2.1%, even after J.P. Morgan raised its price target on the iPhone maker to its highest on Wall Street. The company is close to becoming the first in the world to hit $3 trillion in market value.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 16438.75 will change the main trend to up. A move through 15547.25 will signal a resumption of the downtrend.

The short-term range is 16768.00 to 15547.25. The index is currently trading on the weak side of its retracement zone at 16157.75 to 16301.75, making this area resistance.

The minor range is 15547.25 to 16438.75. Its retracement zone at 15993.00 to 15887.75 is the next downside target.

The main range is 14366.75 to 16768.00. Its retracement zone at 15567.25 to 15284.00 is potential support. This zone stopped the selling at 15547.25 on December 3.

Short-Term Outlook

The early direction on Tuesday is likely to be determined by trader reaction to the short-term 50% level at 16157.75.

Bearish Scenario

A sustained move under 16157.50 will indicate the presence of sellers. If this creates enough downside momentum then look for the selling to possibly extend into 15993.00 to 15887.75.

Look for aggressive counter-trend buyers on the first test of 15993.00 to 15887.75. If 15887.75 fails then look for the selling to possibly extend into 15567.25 – 15547.25.

Bullish Scenario

A sustained move over 16157.75 will signal the presence of buyers. This could trigger a rally into 16301.75. Overcoming this level will indicate the buying is getting stronger with 16438.75 and 16460.00 the next targets.