E-mini NASDAQ-100 Index: Steep Sell-off Puts 12179.50 on Radar

June E-mini NASDAQ-100 Index futures are down sharply late in the session on Thursday, completely erasing a rally from the prior session in a stunning reversal that deepened the market’s losses for 2022. The move came after a major rally for stocks on Wednesday with the NASDAQ Composite cash index jumping 3.19%.

At 19:19 GMT, June E-mini NASDAQ-100 Index futures are trading 12738.75, down 792.50 or -5.86%. The Invesco QQQ Trust ETF (QQQ) is at $310.52, down $19.08 or -5.79%.

The catalyst behind the sell-off was investor worries about whether the Federal Reserve’s rate hike might not be enough to bring inflation under control, forcing the Fed to become more aggressive.

Large tech stocks were under pressure, with Facebook-parent Meta Platforms and Amazon falling 5.8% and 7.1%, respectively. Microsoft dropped 4.7%.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 12709.75 will signal a resumption of the downtrend. A move through 13555.25 will change the main trend to up.

The minor range is 13583.75 to 12709.75. The market is currently trading below its pivot at 13146.75, making it the nearest resistance.

Short-Term Outlook

The direction of the June E-mini NASDAQ-100 Index into the close on Thursday will be determined by trader reaction to the pivot at 13146.75.

Bearish Scenario

A sustained move under 13146.75 will indicate the presence of sellers. If this creates enough downside momentum then look for a test of the main bottom at 12709.75.

Taking out 12709.75 could trigger an acceleration to the downside with the March 5, 2021 main bottom at 12179.50 the next major target.

Bullish Scenario

Overtaking the pivot at 13146.75 late in the session will signal the return of buyers. This could lead to a surge into 13555.25 to 13583.75. Taking out this area could trigger an acceleration to the upside with 13989.25 the next major upside target.