The futures outlook for the e-mini Nasdaq reveals a potential move to the downside prior to several earnings reports being released today.
Futures Outlook for E-mini Nasdaq
The weekly chart for the e-mini Nasdaq shows a potential reversal bar to the downside. Whenever a reversal bar like this forms (also known as a pivot bar), it typically indicates a low will be formed. In this example, not only is there a potential reversal bar, there is also the stochastics indicator looking like a potential oversold condition. Additionally, the daily chart has also formed a potential reversal bar, as well.
The combination of these two bars could potentially indicate a downward movement on the e-mini Nasdaq. This could signal that the upcoming earning reports will not be good news for the markets. Today, both prior to the market opening and at the close of the market opening, there are several significant earning reports expected. For example, Pfizer, Sony, Honda, CME Group, Thomson Reuters, and Sprint are all reporting their quarterly earnings prior to the market opening. Then after the close, Apple, Allstate, Tanger Factory Outlet, and Pap John’s International will be releasing their earnings.
Currently the 45-minute chart of the e-mini Nasdaq is showing divergence as price started to make new highs (red lines on the 45 minute chart show the divergence). Again, signaling that a downward movement may be imminent. The first level of potential support on the 45 minute chart is at 5898 and on the 180 minute it is at 5875.5. These may be key areas for the market today. If either of these areas support price, then the market will likely move up however if these areas fail to support price, a potential short trade could be implemented.