Massive selling in the stock and crypto markets on Monday with NQ dropping down to previous swing high from January and April 2021 swing high which is now key support.
With the stock market in very overbought conditions and the Fed intervening aggressively to buy the market to push ahead of their meeting, NQ rallied over 500 points from the day low.
In overnight globex trading hours NQ has now dropped down about 300 points from the close of the day on Monday. If the Fed does not announce a change in their agressive tapering stance in the morning on Tuesday, and if the Fed is not ready with massive buy programs before the market open and continue into the regular trading hour, we could see another heavy selling.
My guess is the Fed will be prepared to pump trillions of dollars to support the market before the FOMC releases their announcement on Wednesday. But only time will tell.
On the intraday basis, key price level to watch on Tuesday will be at 14,500. If they could continue to push NQ above 14,500 we could see more short-covering, with the next upside target at 15,000, the 200-day moving average on the daily chart, now key resistance..
Key support is still around 13,800 prior swing high from February-April 2021, now key support.
