Tuesday was another down day for the equity market, with NQ down for the second consecutive days. NQ attempted to rally and pushed above 4300 key inflection price level but failed and was sold, and NQ sold off hard into the close.
Many algos are programmed to buy the third pullback day, and Wednesday will be the third pullback day for NQ. If so, we could see an attempted rally in the equity market on Wednesday. However, failure to rally could trigger sharp sell-off, particularly if the market continues to drift lower.
On the short -term time frame, key inflection price level will be 4290.
-- Selling pressure should be subdued if NQ can trade and stay above 4290. First resistance is at 4330.
-- NQ is bearish below 4290, with first support at 4265. A clear and sustained break below 4265 is likely to trigger another round of algo selling.
With the daily chart still bullish but the 60-minute timeframe bearish, look for NQ to remains choppy.
