E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – September 7, 2016 Forecast

September E-mini NASDAQ-100 Index futures closed sharply higher on Tuesday, driven mostly by increased demand for higher risk assets as investors reduced the chances of a Fed rate hike in September. Investors ignored the surprisingly weak U.S. ISM Non-Manufacturing PMI report, while keeping an eye on increased volatility in the crude oil market.

The cash market NASDAQ Composite closed 0.5 percent higher at a new all-time high of 5275.91. The rally was supported by a 1 percent gain in the iShares NASDAQ Biotechnology ETF (IBB).

TECHNCIAL ANALYSIS

Technically, the main trend is down according to the daily swing chart. However, momentum has shifted to the upside with the formation of the new swing bottom at 4749.50. A trade through 4836.75 will turn the main trend to up.

The short-term range is 4836.75 to 4749.50. Its 50% level or pivot at 4793.00 is the key to sustaining the short-term upside momentum.

Based on Tuesday’s close at 4827.50 and the early price action, the direction of the market today is likely to be determined by trader reaction to the short-term downtrending angle at 4816.75.

A sustained move over 4816.75 will signal the presence of buyers. The first target is the August 23 main top at 4836.75. Taking out this top will turn the main trend to up. This could trigger a rally into a long-term uptrending angle at 4846.25. Crossing to the strong side of this angle will put the NASDAQ-100 Index in a bullish position.

A sustained move under 4816.75 will indicate the presence of sellers. This could lead to a labored break because of a number of potential support levels at 4797.50, 4796.75, and 4793.00. The daily chart opens up to the downside under 4793.00 with 4773.50 the next target.

Watch the price action and read the order flow at 4816.75 today. Trader reaction to this angle will tell us if the buying is increasing or if the sellers are taking control.