The E-Mini NASDAQ 100 futures have sold off 200 points from the November high, but support may be ahead at 4114.
4300 Target Reached
I last wrote about the E-Mini NASDAQ 100 futures [CME: NQH15] a month ago, when I mentioned a squeeze could be seen into 4300: “NQ bulls remain firmly in control after successfully squeezing shorts through the 4179.75 key level, which remains the key pivot to watch. Price is currently holding above this level and is attempting to establish acceptance above it, which would suggest a continuation toward the primary weekly bull target at 4292, with 4300 just above.”
The squeeze was perfectly timed, as we were looking for one final push higher heading into the Thanksgiving holiday. As it turns out, price rallied into the 50% key range expansion target of 4331.50 the day after Thanksgiving, which has been the high ever since, as price has taken a 200-point haircut in the last few weeks.
However, despite the recent run of weakness, the NQ remains within a major bull market, and pullbacks of this magnitude start becoming buying opportunities for new highs down the road. The first major buying opportunity could be seen very soon, but more selling pressure will likely be seen first.
Bears Defend Weekly Pivot Range
In a downtrending market, the first pullback to the weekly pivot range typically offers a high probability selling opportunity for bears seeking new lows.
As it turns out, NQ bears defended the weekly pivot range between 4207 and 4249.75 during Monday’s trading, which sparked another round of selling pressure to new lows into 4140. Bears are looking for further weakness to the next lowest HVN, which is 4052, with a shot at 4000 and 3896.75.
Bulls to Defend 4114
NQ bulls may have their first real shot at defending a key level, as prices are quickly approaching the 4114.25 price. This price is a major composite LVN, and is also the exact top of the key range that developed from 4114.25 to 3679.50. The LVN reveals rejection in the volume profile, so the bulls will be looking for opportunities in this zone for a shot at new highs down the road.
Further adding to the confluence at 4114.25 is the fact that 4115 is the previous month’s low price, which means bears would have taken back all of the gains enjoyed by bulls in the month of November in just a few weeks of December trading if this level is reached.
Keep in mind, while 4114 offers a solid first test buying opportunity, failure to hold above this level opens the door to a quick test of the next HVN below, which is 4052.25, with a shot at seeing the center of the key range at 3896.75.
Cheers!
Frank Ochoa
Author, Secrets of a Pivot Boss
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