A large opening gap-up on the equity market on Monday designed to run-over stop-losses of the shorts, but once weak shorts had covered there was not much follow-through buying activities, and after the initial short-covering panic just after the open, the market drifted sideways in a narrow range.
On the 60-minute chart of NQ, Monday's swing high was clearly wave 5 rally as can be seen from February 8th swing low. If so, when wave 5 ends we can expect NQ to pullback down substantially, but how far is difficult to say as it would depends very much on the price of crude oil and the USD/JPY carry trade activities.
But keep in mind that the market is very highly manipulated by central banks and as such, anything can happen.
For Tuesday key inflection price level for NQ will be 4210.
-- NQ is still in a rally mode above 4210, next upside target is 4300.
-- Below 4210 is an early indication the expected larger pullback down move is in progress, with the main key support at 4175.
Margin Debt as % of GDP
