Nasdaq opened with a large gap-down and then trended down to 2520 support on Monday morning before bouncing and then consolidated the rest of the day. Whether it is going to continue to consolidate and go higher as we opens on Tuesday depends on where it opens and trades in the morning in relation to key price level.
For Tuesday Key NQ Level is 2530.
- Above 2530 implies it is still in consolidation mode. If so it should continue to go up, with upside target of 2550 area, first resistance. If it breaks above that resistance, the next level above is 2560. It should not go much above 2560 unless the Fed comes in to buy aggressively.
- Below 2530 implies a decline to re-test Monday's swing low. A break below Monday's swing low can take NQ down to the next level 2505 double-bottom support. If that level clearly breaks it could cause those holding long position to exit, hence triggering a fast and large liquidation drop, potential target 2440 - 2460.
Moody's downgraded 28 Spanish banks on Sovereign risk
