All major stock market indices got whacked very hard the entire trading session on Friday, erasing four day's gain in just one trading session, closing at the low of the day. What is going to happen on Monday will depend on what the Plunge Protection Team a.k.a. the Working Group on Financial Markets will decide to do as they meet for their regular morning briefings before the market opens for trading on Monday.
Should they decide on supporting the market, we will see the market rallying back up to test the high. Without any intervention the market would either consolidate Friday's decline, implies a choppy narrow-range day, or resume Friday's decline by giving us another wide-range down day.
Regardless of what the PPT decides to do on Monday, I will use 2270 as Key Line-in-the-Sand for NQ, bullish above, bearish below.
First and key resistance is 2279-2283, and a sustained break above could trigger a fast short-covering rally. Below Friday's low, I will be looking for a liquidation decline.
For ES, my Line-in-the-Sand is 1275, and key resistance is 1278. A sustained break above could trigger fast short-covering rally. Below Friday low, I will be looking for another liquidation decline.
