Here's a current daily chart of the December contract for the mini Nasdaq:

Click on image to enlarge!

Going back in time a bit, you can see that we held the target extension on August 9th and this served as support. The target was derived by multiplying the June 20th low to the July 26th high by 1.618 and projecting that value downwards from the July high as shown with the red trendlines.

Each pullback from subsequent swing highs after that target/support hold has also held new intraday and daily support. We’re getting pretty close to the initial upside target of the current swing. That’s the value labeled at 2306.25, the 1.272 target extension of the August 31st high to the September 5th/6th low.

The main factor to consider from there is the key .786 resistance retracement at 2330. That’s 78.6 percent of the July 26th high to August 9th low, and it’s considered KEY since it’s the gateway between current price and a new daily swing high, the target at 2556. If this market isn’t ready to commit to taking out the July high, we’ll see that 2330 level hold, but we’ll work with the 2556 target if it should break instead.

Meanwhile the main factor to consider here is that once the 2306 target is met, the pattern to upside is complete unless we also see a break of the key resistance. That leaves price vulnerable to possible failure between those two levels. An important area to exercise extreme care!

For more from Mark including his “Chart of the Day”, visit MJBraun.net.