On Monday NQ opened with a gap-down, then closed the gap before dropping back down to below prior day low. NQ rallied in the afternoon and close at the open, creating a doji candle on the daily chart.
With the bond market open on Tuesday the direction of the stock market will depends on the bond market. A rising yield is bearish for the stock market and a declining bond yield is bullish for the stock market.
Key price level for NQ on Tuesday will be Monday's swing high, as trailing stop-loss for the shorts now congregates just above Monday's high of 7440.
-- A break above Mondays swing high could trigger short-covering. If so resistance is at 7530 the 50-dma daily and 7570 the 20-dma daily.
-- Trading below Monday high implies another large down day or consolidation day. Downside target remains at 200-dma daily, 7100. Potential support is at 7260 prior swing high from March 2018
