As expected the engineered a rally briefly broke above key 50-day moving average (7540) resistance on Monday before pulling back down and close below 7450.
They are certain to try to break the 50-dma again on Tuesday, in order to cause another round of short-covering to propel the market into another higher-high.
On Tuesday, key level to watch will be 7520 for NQ.
-- NQ is bullish above 7520, and if the short are forced to cover we could see 100 to 200 points rally.
-- Trading back below 7520 could attract enough sellers to overwhelm the buyers. If so the next downside target is the 200-ma on the 5-min chart, which at Monday's close was at 7400.
