June E-mini NASDAQ-100 Index futures broke sharply last week, driven lower by an over 10-percent drop in shares of Facebook, a Fed interest rate hike and fears of a trade war.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. The trend turned down last week when sellers took out the March 2 main bottom at 6676.00. Only two weeks ago on March 13, the index posted an all-time high. That move erased the huge break from late January to early February.
Monday’s session will begin with the index down eight sessions from the main top. This puts it in the window of time for a closing price reversal bottom. This chart pattern may not lead to a change in trend, but it could fuel a 2 to 3 day retracement. This is not likely to be driven by a change in investor sentiment, but rather a reaction to short-term oversold technical indicators and oscillators.
The main range is 6192.50 to 7214.50. Its retracement zone is 6703.50 to 6583.00. The close under this zone also indicates a developing downside bias.
The new short-term range is 7214.50 to 6519.00. If the index were to recapture the 50% level at 6703.50 then its retracement zone at 6866.75 to 6949.00 will become the primary upside target.
Daily Swing Chart Technical Forecast
Based on Friday’s close at 6519.00 and the price action on the swing chart, the direction of the June E-mini NASDAQ-100 Index on Monday is likely to be determined by trader reaction to the Fib level at 6583.00.
Since the main trend is down, a sustained move under 6583.00 will indicate the presence of sellers. Taking out 6519.00 will take out last week’s low. The daily chart indicates there is plenty of room to the downside. If the move through 6519.00 creates enough downside momentum, we could see a potential break into 6192.50, the February 9 bottom.
Overcoming 6583.00 will signal the presence of buyers. If there is a strong enough response to this move then we could see a surge into the main 50% level at 6703.50. This price is an even stronger trigger point for an acceleration to the upside.