The equity market futures sold off hard overnight Sunday night, but massive buying by the Fed before the open on Monday managed to erased all the losses.
On Monday, the buy programs continue all morning, pushing NQ back up into 7490 resistance before sellers came back in. NQ then dropped back down towards Friday's low, just above the crucial 20-day moving average on the daily chart, now acting as key support.
Key price level for Tuesday will be 7390 support and 7440 resistance.
-- 7390 is a crucial support and a break is likely to trigger massive algo selling with the next support and target down is the 50-dma on the daily chart, at 7275 as of Monday's close.
-- Breaking back above 7440 could trigger some short-covering, with the next resistance again at 7490
-- Failure to breakout of the 7390 - 7440 price zone will keep NQ in a sideways pattern.
Contagion from Turkish currency crisis is going to be bearish for the market, and may be the catalyst for the selloff.
