On Monday the Fed-PPT managed to caused a huge gap-up opening for NQ to just below key 200-ma resistance on the 5-minute chart, but buy programs failed to break above the 200-ma as sellers came in to sell the resistance.
NQ then tanked down to key support which is at 7100, just below 200-dma daily, a support level that the PPT has been defending for the previous two trading sessions.
7100 will continue to be key price level to watch, as a break below could cause a cascade of selling as stop-losses get run-over.
Key equilibrium price level for NQ on Tuesday will be 7150.
-- IF NQ can stay above 7150 at the open on Tuesday we could see some rally, with resistances at 7200 and 7240, price levels where sellers could come back in to sell. A clear break above 7240 could trigger short covering rally, with the next higher resistance at 7350
. -- Trading below 7150 in the morning will be bearish, with well defended support at 7100. Should 7100 breaks, it could trigger a cascade of selling as stop-losses get run-over. Failure to break will cause another bounce.
