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James Hyerczyk

June E-mini NASDAQ-100 Index futures finished lower on Friday, bringing an end to the record-setting three-day surge. Renewed doubts over the strength of the U.S. economy weighed on prices as well as the rapidly rising number of U.S. coronavirus cases.

Technology stocks fell even after the U.S. House of Representatives approved a $2.2 trillion aid package – the largest in American history – to assist people and companies cope with an economic downturn caused by the coronavirus outbreak and provide hospitals with urgently needed medical supplies.

On Friday, June E-mini NASDAQ-100 Index futures settled at 7568.50, down 275.50 or -3.64%.

In other news, the United States surpassed China and Italy as the country with the most coronavirus cases. In economic news, U.S. consumer sentiment dropped to a near 3-1/2-year low in March, according to a survey released on Friday, a day after data showed a record 3 million surge in jobless claims last week.

Daily June E-mini NASDAQ-100 Index

Daily Technical Analysis

The main trend is up according to the daily swing chart. The main trend turned up on Wednesday when buyers took out the previous main top at 7629.00. A trade through 6628.75 will change the main trend to down.

The minor trend is also up. A trade through 7310.25 will change the minor trend to down. This will also shift momentum to the downside.

The main range is 9780.50 to 6628.75. Its retracement zone at 8304.75 to 8653.00 is potential resistance.

The intermediate range is 9006.75 to 6628.75. Its retracement zone at 7817.75 to 8098.50 stopped the rally at 7893.50 on Friday.

The short-term range is 6628.75 to 7893.50. Its retracement zone at 7261.00 to 7111.75 is the first downside target.


Short-Term Outlook

The price action on Friday suggests that all the money in the world isn’t that important to investors, but rather the end of the coronavirus pandemic. So with the number of cases and deaths rapidly increasing over the weekend and no end in sight to the economic damage being inflicted by the virus, Friday’s closing price reversal top may be a sign that the selling pressure is getting ready to resume.

If the market continues to rally then we expect to see more stoppage inside the two retracement zones. And move backing and filling type trading.

A follow-through to the downside following Friday’s potentially bearish chart pattern suggests a 2 to 3 day break into at least 7261.00 to 7111.75.

Taking out 7111.75 with big volume could trigger an acceleration into 6628.75 and beyond.

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