June E-mini NASDAQ-100 Index futures closed sharply lower on Monday as inflation fears drove investors away from market-leading growth stocks in favor of cyclicals, which stand to benefit most as the economy reopens.
Big Tech got clobbered on Monday as investors exited stocks like Apple and Microsoft. Facebook lost more than 4%, while Amazon and Netflix both dropped over 3%. Alphabet dipped more than 2% and Tesla shed more than 6%.
At 04:33 GMT, June E-mini NASDAQ-100 Index futures are trading 13226.75, down 130.00 or -0.97%.
Inflation concerns will be in the minds of investors when the Labor Department releases its latest CPI report on Wednesday.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. The downtrend was reaffirmed earlier in the session. A trade through the intraday low at 13170.00 will signal a resumption of the downtrend.
A move through 14064.00 will change the main trend to up. This is highly unlikely, but since the index is down eight sessions from this top, we could start watching for closing price reversal bottom.
The minor trend is also down. A trade through 13818 will change the minor trend to up. This will shift momentum to the upside.
The main range is 12200.00 to 14064.00. Its retracement zone at 13132.00 to 12912.00 is the primary downside target. We could see a technical bounce on the first test of this area. This zone is also controlling the near-term direction of the index.
The short-term range is 12609.75 to 14064.00. The index is currently trading inside its retracement zone at 13337.00 to 13165.25.
The first minor range is 13818 to 13170. Its 50% level at 13494.00 is a potential upside target and possible resistance.
The second minor range is 14064.00 to 13170.00. Its retracement zone at 13617.00 to 13722.50 is another upside target.
Daily Swing Chart Technical Forecast
The direction of the June E-mini NASDAQ-100 Index on Tuesday is likely to be determined by trader reaction to 13356.75.
A sustained move under 13356.75 will indicate the presence of sellers. Taking out 13336.75 will indicate the selling is getting stronger. This could lead to a test of a pair of retracement levels at 13165.25 and 13132.00. Watch for a technical bounce on the first test of this price cluster.
If 13132 fails as support then look for an acceleration to the downside with 12912.50 the next potential downside target. This level is also the trigger point for an acceleration to the downside.
A sustained move over 13356.75 will signal the presence of buyers. This could trigger a surge into 13494.00. Since the main trend is down, sellers could come in on the first test of this level. Taking it out could trigger an acceleration into 13617.00 to 13722.50. Watch for sellers on a test of this zone. They are going to try to form a secondary lower top.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire