NQ continued to rally into another higher high on Wednesday morning. However, after the initial early morning rally profit-taking pushed NQ down to close below Tuesday closing price.
On the 60-min chart, it is very obvious that NQ has rallied in a 5-wave pattern from December 24th low to Wednesday high, with Tuesday and Wednesday rally as wave 5 up. . Once the 5-wave rally is complete, NQ should then decline.
The first support level to break to indicate that wave 5 rally may have ended is the 20-period moving average on the 60-min chart, then a clear break below its 50-moving average on the 60-min chart confirms that the 5-wave rally has ended, and a retracement decline has started.
For Thursday that key support level is 6660.
-- Trading below 6660 is bearish, the next support is 6600. A break below 6600 could trigger heavy selling as trailing stop-posses gets run-over.
-- Trading above 6660 will keep selling under control, but it has to break back above 6690 to get back to bullish bias and trigger a rally to another higher high.
