With the daily chart timeframe in sell mode and still not yet entering an oversold condition, morning rally on Monday attracted heavy selling at key line-in-the-sand resistance of 6660, overwhelming the short-term buyers.
As such, the decline resumed on Monday, with a small profit-taking bounce at the end of the days to created a large down day. Unless NQ can rally above key line-in-the-sand on Tuesday, selling should continue on Tuesday.
Key line-in-the-sand for NQ on Tuesday will be at around 6530.
-- Trading above 6530 is an indication NQ may be going into a sideways consolidation mode following a large down day on Monday. However, any rally would need to clearly break above 6530 to trigger short-covering. If so the next resistance where selling would come back in is at 6660.
-- NQ remaining below 6530 on Tuesday is an indication NQ downtrend is still in progress.
Whether or not the Fed/PPT would intervene in the stock market ahead of the FOMC decision on Wednesday it is difficult to forecast, thus we would just have to watch the key price levels.
