On Thursday NQ opened with a gap-down below 3915 key inflection price zone. The gap-down opening triggered a combination of arbitrage buy programs and also algo buy programs, pushing price up to close the gap and a test of FT pivot (resistance) from below.
When NQ failed to rally above a convergence of resistance including gap-close, FT Pivot, 20-MA and 50-MA on the 5-minute chart, it attracted an overwhelming number of traders to sell aggressively, causing a cascade of momentum sell algos, tanking the market hard.
NQ finally fund support around 3850-3860 support zone where the end of day profit-taking crowd cause a 20-point rally into the close.
The momentum going into the close was negative, setting up another large liquidation decline on Friday, unless NQ can get back above 3885 on Friday.
Below 3885 is an indication the decline is not over, the next support is 3800, strong support, but with the conflict in Ukraine continuing to intensify, support may not hold, so watch market internals for additional clues.
