E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – Straddling Main 50% Level at 7510.50

September E-mini NASDAQ-100 Index futures are trading sharply lower at the mid-session on Wednesday. Fear of a recession has investors rattled after China reported weaker-than-expected industrial production, and GDP data from Germany failed to impress traders. The 2 – 10 year U.S. Treasury yield inverted for the first time since 2007, sending a signal for a recession in the near future.

At 16:55 GMT, September E-mini NASDAQ-100 Index futures are trading at 7505.25, down 242.75 or -3.13%.

The highlight of the day is the strong downside momentum. However, the market is also trading near the mid-point of its seven day range and its June to late July range.

Daily Technical Analysis

The main trend is down according to the daily swing chart. The new main top is 7789.50. A trade through this level will change the main trend to up. A move through 7224.50 will signal a resumption of the downtrend.

The main range is 6969.00 to 8051.75. Its retracement zone at 7510.50 to 7383.50 is controlling the near-term direction of the index. This zone is currently being tested.

The intermediate range is 8051.75 to 7224.50. Its retracement zone at 7638.25 to 7735.75 is resistance.

The short-term range is 7224.50 to 7789.50. Its retracement zone at 7507.00 to 7440.25 is potential support.

Daily Technical Forecast

Based on the early price action and the current price at 7505.25, the direction of the September E-mini NASDAQ-100 Index into the close is likely to be determined by trader reaction to the main 50% level at 7510.50.

Bearish Scenario

A sustained move under 7510.50 will indicate the presence of sellers. If this continues to generate enough downside momentum then look for the selling to possibly extend into the short-term Fibonacci level at 7440.25. If this fails then look for a break into the support cluster at 7382.50 to 7377.00.

The uptrending Gann angle at 7377.00 is the trigger point for a potential acceleration into the main bottom at 7224.50, followed by an uptrending Gann angle at 7173.00. This is followed by another uptrending Gann angle at 7071.00. This is the last potential support angle before the 6969.00 main bottom.

Bullish Scenario

A sustained move over 7510.50 will signal the presence of buyers. The first target is the downtrending Gann angle at 7571.75. Overtaking this angle could trigger an acceleration to the upside with the next target the intermediate retracement zone at 7638.25 to 7735.75.