On Friday, the Fed buy programs managed to gap-open NQ up above breakout level, triggering short-covering activities then continued all day, not allowing the shorts to exit without pain. NQ closed at the day high just below prior swing high, now key resistance level, 7870.
With NQ closing at the day high and in overbought territory on the intraday 5-minute chart, NQ wound need to break above 7870 and trigger more short covering to cause another rally day.
Should NQ fail to break above the high on Monday, or break and fail to stay above the high 7870, we could see a sharp drop down to support, first support is at 7800 for Monday
The current price action is starting to get more volatile again, typical of a topping pattern, sharp selloff followed by sharp rally, but NQ needs a sustained break below breakout level, 7750 to cause a sustained selling that could last 2 to 3 months.
Key price level for NQ on Monday will be 7870 resistance and 7750 support.
-- Rally above 7870.
-- Potential Crash below 7750
Dow futures has dropped 500 points as China considers cancelling trade talk due to President Trump tariff threats. Crash alert
-- Rally above 7870.
-- Potential Crash below 7750
Dow futures has dropped 500 points as China considers cancelling trade talk due to President Trump tariff threats. Crash alert
