E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – Reaction to 12134.00 Sets the Tone

December E-mini NASDAQ-100 Index futures are trading slightly better on Wednesday as we approach the cash market opening. During the pre-market session, most of the chatter was about the coronavirus pandemic and the lack of progress toward a fiscal stimulus package.

Traders aren’t too worried about the stimulus because some feel that it’s just a matter of time when the financial aid will be approved. But the rising infections in the United States is raising come concerns. Furthermore, the news that Eli Lilly and Johnson & Johnson have hit the pause button on their respective studies on antibodies and a vaccine, is forcing investors to sit up and face the possibility that we may not have a working vaccine until spring 2021.

At 12:50 GMT, December E-mini NASDAQ-100 Index futures are trading 12107.75, up 13.75 or +0.11%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, but momentum may be getting ready to shift to the downside following the formation of a closing price reversal top on Tuesday.

A trade through 12019 will confirm the potentially bearish chart pattern. This could lead to the start of a 2 to 3 day correction. A move through 12249.00 will negate the chart pattern and signal a resumption of the uptrend.

The minor range is 12249.00 to 12019. Its 50% level or pivot comes in at 12134.00. Traders are currently straddling this level.

The first major downside target is the long-term Fibonacci level at 1.1761.50. Since the main trend is up, buyers are likely to come in on a test of this level.

Daily Swing Chart Technical Forecast

The direction of the December E-mini NASDAQ-100 Index on Wednesday is likely to be determined by trader reaction to the pivot at 12134.00.

Bullish Scenario

A sustained move over 12134.00 will indicate the presence of buyers. The first upside target is 12249.00. Overcoming this level could trigger an acceleration into the next main top at 12444.75.

Bearish Scenario

A sustained move under 12134.00 will signal the presence of sellers. This could trigger a break into 12019.

Taking out 12019 will confirm the closing price reversal top. This could trigger the start of a 2 to 3 day break with 11761.50 the minimum downside target.

For a look at all of today’s economic events, check out our economic calendar.