A massive selloff in the equity market on Friday morning with the S&P 500 dropping down to its key 200-day moving average on the daily chart, where short-sellers covered their short position to lock in their massive profit and reversed long ahead of the weekend.
A huge rally in the afternoon with the main indices closing in the middle of their range between support and resistance.
With Friday low for the Dow and Nasdaq 100 still above their respective 200-DMA support on their daily chart, on Monday, the stock market can still go either way, down to retest the low and support, or up to retest resistance,.
For NQ on Monday the key inflection price level is 6450.
-- Staying above 6450 is likely to generate more short-covering with upside target at 6720 key resistance level on the daily chart.
-- Trading back below 6450 is going to attack new selling, with downside target and support at its 200-day moving average on the daily chart.
