With the Dow, the S&P 500 and the Nasdaq 100 all bumping against overhead resistance, currently the 200-DMA, their failure to break above resistance from the ECB stimulus on Thursday led many longs to take profit that tank the markets hard on Thursday.
With the daily chart still in a bullish mode, the selloff gave many the opportunity to go long. Massive buy programs managed to push the market up, and NQ managed to just below prior day close. But the indices would need to break above 200-DMA soon, as failure to do is going to attract short-sellers to come back with a vengeance.
On the short-term timeframe, key price level going into Thursday will be 4290.
-- Failure to break and stay above 4290 could trigger another round of sell programs, but since Friday tends to be choppy sideways type of days, it is difficult to predict whether or not tomorrow trading will be choppy trending.
- Trading above 4290 should keep short-sellers at bay, but the indices need to break above their respective 200-DMA to keep the bears in check.
