Both Nasdaq and S&P opened and quickly dropped down to support on Tuesday but the Fed algorithm buy programs kicked in and quickly rallied the market back up, runing-over trailing stop-losses and triggering momentum algo buy programsthat quickly took both NQ and ES ti their respective resistance levels, 1848 - 1851 for ES and 1700 for NQ..
When the buy programs failed to push the market through resistance, profit-taking and momentum algos sell programs pushed the market back down to support.
Again, when the morning support held, short-sellers covers, pushing the market up to rsistance at the closing bell.
For Wednesday key price zone and inflection level to watch for are 1848-1851 for ES and 3685 for NQ
-- More shorts will be forced to cover if price trades above key inflection price zone on Wednesday.
-- Trading below key inflection price zone could attract short-sellers to come back in to sell the market.
First resistance is Monday's swing high., first support is 3670 for NQ and 1838 for ES.
-- If NQ can break and then stay above Monday's swing high, next upside target for NQ is 3725.
-- For ES, a sustained break above 1848-51 could attract momentum algo and should push ES into a new higher high above Monday's swing high.
-- A clear and sustained break below support 1838 for ES and 3670 for NQ could cause a fast liquidation decline, but with Janet Yellen testimony before congress on Thursday, it is a sure bet that the Fed algorithm buy programs would step in aggressively.
Gold continued to rally.
