After dropping down to support soon after the open on Tuesday the market rallied fast, but failed to break to higher high.
NQ rallied up to .786 fibonacci retracement of the high, with ES pushing slightly above .786 fibonacci level before reversing back down, broken below key inflection price level, closing near the day low, a bearish close.
The close is indicating either a consolidation in the morning on Wednesday before dropping down to supports or opened gap-down and run-down to support in the morning.
However, opening above key inflection price level is an indication the market may go into a short-covering rally mode.
Where the market opens in relation to inflection price level will determine the direction of morning trend on Wednesday.
Key price level in the morning on Wednesday is 3700 for NQ and 1869 for ES.
-- Below implies bearish bias, target a bereak beklow Tuesday low.
-- A clear break below Tuesday low will trigger momentum algo that can quickly tank NQ down to 3770 then 3730, down to 1848-1851 for ES
-- Above implies likely short-covering rally.
Ukraine parliament on Tuesday approval for the use of nuclear weapon against Russia spooked the market on Tuesday, the conflict in Ukraine should continue to cause volatility in the market.
