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James Hyerczyk
E-mini NASDAQ-100 Index

September E-mini NASDAQ-100 Index futures finished higher for a second session on Wednesday after confirming the previous day’s closing price reversal bottom. The price action suggests that the major investors may have already priced in the negative headlines and are now shopping for value amongst the beaten up individual shares. Furthermore, conditions have calmed somewhat in the global bond markets after a plunge in yields on Wednesday created a bit of a panic sell in the stock market during the pre-market session.

On Wednesday, September E-mini NASDAQ-100 Index futures settled at 7553.25, up 37.75 or +0.50%.

Daily September E-mini NASDAQ-100 Index

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. However, momentum is trending higher following the August 6 closing price reversal bottom at 7224.50 and its subsequent confirmation on Wednesday.

A trade through 7224.50 will negate the closing price reversal bottom and signal a resumption of the downtrend with the main bottom at 6969.00 the next target.

The main trend will change to up on a trade through 8051.75. This is highly unlikely today, but there is room for a normal 50% to 61.8% retracement zone of the current break. Traders will first have to overcome this zone in order to be in a position to challenge the all-time high at 8051.75.

The main range is 6969.00 to 8051.75. Its retracement zone at 7510.25 to 7382.50 is controlling the near-term direction of the index. The market is currently trading on the strong side of this zone, giving it a slight upside bias.

The short-term range is 8051.75 to 7224.50. If the upside momentum continues then look for a test of its retracement zone at 7638.25 to 7735.75.

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Daily Swing Chart Technical Forecast

Based on yesterday’s close at 7553.25, the direction of the September E-mini NASDAQ-100 Index on Thursday is likely to be determined by trader reaction to the main 50% level at 7510.25.

Bullish Scenario

A sustained move over 7510.25 will indicate the presence of buyers. If this move generates enough upside momentum then look for the rally to possibly extend into the short-term retracement zone at 7638.25 to 7735.75.

Since the main trend is down then look for sellers to come in on a test of 7638.25 to 7735.75. They are going to try to form a secondary lower top. If they are successful then look for another break with sellers trying to takeout 7224.50 in an effort to resume the downtrend.

On the upside, overtaking and sustaining a rally over 7735.75 will indicate the buying is getting stronger.

Bearish Scenario

A sustained move under 7510.25 will signal the presence of sellers. If this move creates enough downside momentum then look for sellers to drive the index into the main Fibonacci level at 7382.50. This is a potential trigger point for an acceleration into 7224.50. If this bottom is taken out then look for the selling to extend into the next main bottom at 6969.00.

Overview

If you prefer to trade the trend and short strength instead of weakness then you’ll get your shot on a test of 7638.25 to 7735.75.

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