On Wednesday NQ opened below its prior day low, a breakout day, which implies a trending down day with very small chance of a reversal.
S&P 500 futures opened below its key 50-day moving average, triggering massive algorithm sell programs. Dow futures the YM opened below its 20-dma daily, triggering 20-dma algos sell programs. A perfect storm, with all the three major indices all selling, triggering massive down day in all the 3 major indices.
On Wednesday, while NQ closed decisively below its 200-dma daily, S&P 500 closed just slightly above its 200-dma daily and Dow futures YM close quite a bit above its 200-dma daily, setting up a very interesting day on Thursday.
With NQ clearly below its key 200-dma and S&P 500 slightly shove its 200-dma daily, Thursday price action would greatly depends on where the S&P 500 trades at in relation to its 200-dma daily.
-- If there is enough buyers at the 200-dma daily to hold-off an avalanche of selling, we could see the market bounce.
-- A break below the 200-dma daily in the S&P would spell disaster for the market as selling would overwhelm buying.
As for NQ intraday price action on Thursday, key resistance to break will be its 50-ma on the 5-minute chart.
-- Trading below its 50-ma on the 5-minute charts implies continual fast selloff, with NO support NQ could just continue to crash.
-- Breaking back above 50-ma implies an A-B-C wave rally, targeting 200-ma on the 5-min chart.
