E-mini NASDAQ-100 Index

E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – Investors Bracing for Hawkish Remarks from Powell

September E-mini NASDAQ-100 Index futures are trading lower early Wednesday as renewed concerns about rising interest rates and a recession weighed on highly-sensitive growth stocks.

U.S. traders are also following the weaker lead set in Asia and Europe that erased the optimism on Wall Street that lead to the market’s best day in over a month on Tuesday.

At 10:22 GMT, September E-mini NASDAQ-100 Index futures are trading 11393.25, down 184.00 or -1.59%. On Tuesday, the Invesco QQQ Trust ETF (QQQ) settled at $281.21, up $6.52 or +2.37%.

Focus Shifts to Fed Chair Powell

U.S. Federal Reserve Chair Jerome Powell is scheduled to begin two-day testimony later today at 13:30 GMT. During today’s testimony before the Senate Banking Committee, investors will be looking for clues about whether another 75-basis-point rate hike is in the cards for July.

More importantly, however, Powell may be asked about the chances of a recession and his answer is likely to be a market moving event. Goldman Sachs, meantime, believes a recession is becoming increasingly likely for the U.S. economy, saying that the risks of a recession are “higher and more front-loaded.”

If Powell comes across as hawkish then look for another round of steep losses. If Powell finds a way to soothe the bears, we could see a short-covering rally.

Daily September E-mini NASDAQ-100 Index

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 11068.50 will signal a resumption of the downtrend. A move through 12973.75 will change the main trend to up.

The minor trend is also down. A trade through 11794.25 will change the minor trend to up. This will shift momentum to the upside.

The minor range is 11794.25 to 11068.50. The index is currently straddling its pivot at 11431.50.

The next resistance is a long-term 50% level at 11671.25. This is followed by a short-term resistance zone at 12021.25 to 12246.00.

On the downside, the support is a long-term Fibonacci level at 10468.25.

Daily Swing Chart Technical Forecast

Trader reaction to the minor pivot at 11431.50 is likely to determine the direction of the September E-mini NASDAQ-100 Index on Wednesday.

Bearish Scenario

A sustained move under 11431.25 will indicate the presence of sellers. If this creates enough downside momentum then look for the selling to possibly extend into 11068.50.

Taking out 11068.50 will indicate the selling pressure is getting stronger. This could lead to a test of the November 2, 2020 main bottom at 10944.00, followed by the long-term Fibonacci level at 10468.25.

Bullish Scenario

A sustained move over 11431.50 will signal the presence of buyers. This could trigger a move into the long-term 50% level at 11671.25, followed by the minor top at 11794.25.

Taking out 11794.25 will shift momentum to the upside with 12021.25 – 12246.00 the next key objective.

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Published by

James Hyerczyk

James A. Hyerczyk has worked as a fundamental and technical financial market analyst since 1982. His technical work features the pattern, price and time analysis techniques of W.D. Gann.