In less than a week, the emini Nasdaq has fallen over 200 points. Are bears finally stepping in on the US indices or is the recent fall in the emini Nasdaq due to traders taking profits prior to the Non-Farm Employment Change release on Friday and the FOMC release on Wednesday, December 13th? And, will this dramatic fall rollover to the other US indices?
Currently, the only support area for the Nasdaq is around the 6230 area. If this area fails to support price, and at the moment it does not look like it will as the daily chart just formed a strong bearish bar to the downside. The the next area is another 200 points away at 2047. Additionally, the weekly may be forming a three-bar reversal to the downside, indicating more downward movement on the weekly. If the next two weeks continue to move down, a three bar reversal will also form on the monthly, sending price even further down.
On the E-mini Dow Jones, the daily has formed a reversal bar to the downside, indicating that today may be a bearish day. If the remainder of the week continues down, then this will also form a reversal bar to the downside on the weekly, sending price down even further. This pattern, like the Nasdaq, may also roll into the monthly chart, as well. The first level of support for the emini Dow Jones is at 23533 with a secondary support area at 22819.
On the E-mini S&P 500, the daily formed a reversal bar yesterday, which is likely to form a bearish candlestick today, as well. If price continues to move down the remainder of the week, the E-mini S&P 500 weekly chart will also form a reversal bar similar to the daily chart. Again, like the other US indices, this is likely to send price down even further.
While some may be wondering if this is the start of a bear market, it may also be traders taking profits from the most recent bull run. However, with the current price bar formations on the daily chart, it would also seem that the bulls are exiting their position and bears may be stepping in.