On Monday, after opening with a gap-up above prior trading day close, forcing the shorts to cover, NQ rallied in a choppy pattern, clearly not attracting enough buyers to maintained a sustained rally.
Once the shorts had covered selling then starts to overwhelm buyers causing NQ to tank back down to support. Supports buying algorithm plus then end of day profit-taking activities caused a bounce into the close, in the middle of the trading rage, setting up either a rally or a selloff in the morning on Tuesday.
Key inflection price level for NQ on Tuesday will be 5990.
-- Trading back above 5990 is likely to trigger some short-covering rally.
-- Failure to break back above 5990 is going to be bearish, but key support remains at 5960
On the daily timeframe, NQ is still inside a choppy trading zone.
Here's a monthly snapshot of the S&P index going back to December 2007.
