On Tuesday, NQ opened with a huge gap-down below key 20-dma on the daily chart, 8300, but very quickly bounce off prior-high turned-support at 8165 area.
The market is now in extreme oversold on the short term timeframe, and may need to consolidate for a day or two before resuming back down to its next major support, the 50-dma on the daily chart, now at 8050.
Key short term intraday price level for NQ on Wednesday will be at 8220
-- Trading above 8220 on Wednesday will keep selling under control until it reaches resistance at 8300.
-- Trading back below 8220 is likely to trigger selling, but with stop-losses congregating below Tuesday swing low, NQ would need a sustained break below Tuesday swing low to trigger another round of algos selling. If so the next support is at 8050, although it is likely to get penetrated on an intraday basis.
