E-mini NASDAQ-100 Index Trying to Form Potentially Bullish Closing Price Reversal Bottom
March E-mini NASDAQ-100 Index futures are bouncing back late in the session on Monday after hitting its lowest level since October 18 earlier in the day. Due to the prolonged move down in terms of price and time, the index is currently in a position to post a closing price reversal bottom that could fuel the start of a minor counter-trend rally.
At 19:26 GMT, March E-mini NASDAQ-100 Index futures are trading 15459.00, down 122.00 or -0.78%. This is up from an intraday low of 15152.50. The Invesco QQQ Trust Series 1 EFT (QQQ) is at $376.99, down $2.85 or -0.75%.
In the cash market, the NASDAQ Composite was down more than 6% for the year and at one point on Monday was more than 10% below its intraday record high from November. High growth stocks in particular have struggled as interest rates jumped, driving stocks and bonds down at the same time.
The stock index came off its lows in afternoon trading and the 10-year Treasury yield dipped back below 1.8%.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. A trade through the intraday low at 15152.50 will signal a resumption of the downtrend. The main trend will change to up on traders through 16564.00 and 16659.50. These are the last two main tops before the contract high at 16768.00.
The main range is 14366.75 to 16768.00. The index is currently testing its retracement zone at 15567.50 to 15284.00. This area is controlling the near-term direction of the index.
The new minor range is 16659.50 to 15152.50. Its retracement zone at 15906.00 to 16084.00 is the primary upside target. Since the main trend is down, we expect to see sellers re-emerge on a test of this area.
The direction of the March E-mini NASDAQ-100 Index into the close on Monday is likely to be determined by trader reaction to 15581.00.
A sustained move under 15581.00 will indicate the presence of sellers. If this creates enough downside momentum then look for a retest of 15284.00. If it fails then look for the selling to possibly extend into 15152.50.
Taking out 15152.50 is a potential trigger point for an acceleration to the downside.
A sustained move over 15581.00 will signal the presence of buyers. Taking out the intraday high at 15669.00 will indicate the buying is getting stronger. This could trigger a late session acceleration into 15906.00 to 16084.00.
A close over 15581.00 will form a potentially bullish closing price reversal bottom. If confirmed, this could trigger the start of a 2 to 3 day counter-trend rally.