E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – Volatile Rebound Driven by Lower Treasury Rates

September E-mini NASDAQ-100 Index futures are trading sharply higher late in the session on Tuesday, bucking the overall bearish intraday trend for higher-risk assets.

The tech-weighted index was pressured earlier in the session as investors dumped shares amid rising fears of a recession.

However, the market turned around after a U.S. appeals court on Tuesday struck down an order by the Securities and Exchange Commission that would have allowed some financial firms that are not stock exchanges to have a say in how essential stock market data is priced and disseminated.

At 19:19 GMT, September E-mini NASDAQ-100 Index futures are at 11736.50, up 125.25 or +1.08%. The Invesco QQQ Trust ETF (QQQ) is trading $285.19, up $3.06 or +1.08%.

Buyers Bet Fed Could Become Less-Hawkish

Although recession fears weighed heavily on the market, some investors believe this could force the Federal Reserve and other major central banks to become less-aggressive and lift interest rates at a slower pace. It’s only speculation, but it seems to have been enough to scare a few of the weaker shorts out of the market.

Short-Term Outlook

Trader reaction to the minor 50% level at 11806.50 is likely to determine the direction of the September E-mini NASDAQ-100 Index into the close on Tuesday.

Bullish Scenario

A sustained move over 11806.50 will signal the presence of buyers. If this move generates enough upside momentum then look for a surge into the short-term retracement zone at 12021.25 to 12246.00.

This is the last potential resistance before the main top at 12262.00. Taking out this price will change the main trend to up.

Bearish Scenario

A sustained move under 11806.50 will indicate the presence of sellers. This could lead to a retest of the long-term 50% level at 11671.25, followed by the minor Fibonacci level at 11524.50.

If 11524.50 fails to hold then look for a retest of the minor bottom at 11351.00. This is a potential trigger point for an acceleration into the main bottom at 11068.50.

Side Notes

Aggressive counter-trend buyers are trying to form a potentially bullish secondary higher bottom at 11351.00.

This chart pattern will be confirmed if buyers can take out 12262.00. A trade through 11068.50 will confirm the formation of a potentially bearish secondary lower top at 12262.00.