Guideline For Tuesday

With the Fed buy programs in full speed right from the open on Monday NQ trend up all day into the close, a third up days in a row. The rally that started from last Thursday swing low is now in its wave 5 up, and in overbought condition on the 60-minute chart, and may be ready to go into a larger pullback-down mode at any time now, but as long as the drop does not violate key support level, the rally should continue.

The Fed is likely to continue to buy the futures market on Tuesday in order to avoid the repeat of recent market collapse.Whether or not they are able to hold the market up against the backdrop of global credit contraction, only time will tell and it will depend on where it trades in relation to key price level.

For Tuesday key price support level to watch for in NQ is 3840.

-- As long as NQ can stay above 3840 on Tuesday it should continue to go up, next resistance is 3895, if that resistance does not hold, then 3930 - a strong resistance.

-- Breaking below 3840 could trigger algo sell programs that could tank NQ quickly down to 3790

NQ Guideline For Monday

The market posted a 2-day rally last week Thursday and Friday likely due to massive buy programs engineered by the Fed. However, the manufactured Ebola scare is really starting to cause panic in the market that could lead to a massive "Crash"

A resumption of the downtrend on Monday is an indication that the decline is very strong and should take out the recent swing low very quickly.

On the other hand, another rally day on Monday would imply that the market is going into a larger pullback - up mode.

Key price level for NQ on Monday is around 3790.

 -- Below 3790 is an indication the downtrend is resuming, next support is 3730 then 3700.

--  Remaining above 3730 implies NQ is still in a pullback-up mode, resistances are 3840-3850, then 3890-3900

Friday Guideline for NQ

NQ found temporary support at yesterday low as NQ on Thursday consolidated between 3700 support and 3800 resistance all day.

Whether or not NQ will continue to consolidate inside the range on Friday, only time will tell, but a breakdown below 3700 support on Friday is an indication NQ is in a "crash" mode. The market, after having been manipulated by the Fed for so long, is very illiquid, without enough buyers to absorb sell orders, the market is susceptible to crashing.

Key price level for NQ on Friday is 3700 support and 3800 resistance.
-- Staying inside the range implies NQ is in consolidation mode before the downtrend resumes.
-- A sustained break below 3700 is very bearish, as it could ignite another round of algo selling and forced margin liquidation.
-- If NQ can mount a sustained break above 3800, it could trigger some short-covering rally as some traders may take profit going into the weekend.

Guideine For Thursday

On Wednesday the downtrend on the daily chart continued. Vix spiked to multi-year high.

On Wednesday, NQ opened with a huge gap-down then rallied up towards resistance, but was quickly sold-off, NQ tanked hard dropping almost 100 points down to strong support before rallying back up over 100 points to resistance before dropping back down into the close, setting up a doji day on the daily chart.

We can now see that the second downleg has extended over 1.618 of the first downleg, qualifying it as wave 3 down. If so, and if wave 3 down has found support at prior swing high, we should see several days of rally before the next downleg, wave 5 resumes. However, if wave 3 is still in progress, NQ should continue to tank on Thursday.

Key price level for Thursday is 3690.

-- Above 3690 implies NQ has found some temporary support to launch wave 4 retracement. with strong resistance at 3800.Typical target for wave 4 retracement are .382 and .50. The 382 retracement is 3830 and .50 retracement level is 3867.

-- Trading below 3690 implies wave 3 is still in progress and look for more forced margin call liquidation decline.

Guideline For Wednesday

Market sell-off continued on Tuesday, with NQ spotting a familiar intraday pattern, morning sell-off that was followed by lunch rally then afternoon selloff going into the close.

The declining momentum seems to have slowed down on Tuesday, and there are 2 possible reasons for that:

1. It may be slowing down before a snap-back rally going into the weekend, or,

2. A running correction, an indication the market is setting up for a massive selloff once running correctionhas ended.

Key support level for NQ on Wednesday will be 3800.

-- Staying above 3800 implies either a potential rally but NQ needs to trade above 3850 to potentially trigger a short-covering rally. Inability to break and stay above 3850 implies choppy sideways pattern.

-- Breaking below 3800 implies the slowing down of momentum is a running correction. If so, it would be followed by a liquidation decline, next support is 3730 and 370.

Guideline For Tuesday

Monday was the 3rd very large down day in a row for NQ, an indication that the sell-off is impulsive, with markets collapsing worldwide. Australia experience their 2nd flash crash on Monday, Japan and New Zealand had their flash crash a few weeks ago, North American market is not immune to it.

On Monday we saw an early morning sell-off that was reversed sharply, likely by the Fed buyers, that was again sold in the afternoon, with the market again closing at the day low, an indication that the buyers capitulated into the close, a characteristics of forced margin selling.

Key resistance for NQ on Tuesday is 3850.

-- Inability to break and stay above 3850 is going to attack more selling, with the next target down  at 3785. If that support does not hold stronger support lies at 3700 - 3730.

-- Breaking and staying above 3850 target the next resistance at 3900.

Guideline For Monday

The market tanked hard on Friday, including NQ which tanked hard for the second day in a row. Whether or not it is going to tank for the third day in a row on Monday, only time will tell. Keep in mind that forced margin selling could tank the market harder and harder as the decline continues --- Potential Crash Scenario

So far, last Friday swing low measured 1:1 down from September 19 swing high. On the daily chart, whether or not the 2nd down leg is wave C or wave 3 from the high, only time will tell, but the momentum on this 2nd downleg is much stronger than the 1st downleg, an indication that it is likely wave 3 down.

If it is wave 3, the 2nd downleg should continue down much further, usually to the 1.618 or larger extension of the first downleg, then we would see wave 4 bounce to be followed by wave 5 down targeting lower low to complete the cycle.

On the 5-min chart key price level for NQ on Monday is 3900.

-- Below 3900 NQ should continue down, next support below Friday low is 3845 then 3825 double bottom support from July and August low. 

-- If those support does not hold the next support below is 3730 and 3700

-- If for some reason the Fed came back into the market and buy aggressively, we could see some short-covering on a sustained break-back above 3900.

Guideline For Friday

Volatility is back

On Thursday, after closing the opening gap, NQ promptly decline breaking key support level 4020 down to its 50-moving average support before bouncing. 

Although it bounce off its 50-ma on the 5-minute chart to re-test the gap-close price level, it was not able to break above it to change the bearish dynamics as it quickly got sold aggressively resulting in a nice 5-wave decline before consolidating. At the end of consolidation, NQ either continues its downtrend or reverses back up, the key will be where it trades in relation to its key price level area.

Key price level for NQ on Friday will be 3985

-- Failure to break and stay above 3985 is an indication NQ is going to resume its downtrend that started on Thursday, and tank down to re-test Wednesday swing low. Breaking below Wednesday swing low could attract another round of momentum algo sell programs than has the potential to tank the market very hard.

-- Staying above 3985 could trigger another round of short-covering, resistances are 4005 then 4025.

Guideline For Thursday

After trending down in the morning on Wednesday, massive buy programs most likely engineered by the FED, designed to panic short-sellers, rocketed NQ upward, breaking through 2 resistance levels before stalling at double-top with Monday swing high. 

Whether or not most of the short-sellers has covered it is difficult to say, but it seems many had covered in panic on Wednesday, so unless real buyers can show up on Thursday NQ can fall back down again.

Key price level for Thursday is 4020.

-- As long as any pullback down does not clearly violate 4020 support the uptrend that started on Wednesday is still alive, the next resistance is going to be 4050 then 4065.

Guideline For Wednesday

On Tuesday NQ opened with a gap-down below support then rallied back up to re-test broken support-turned resistance, twice, before resuming its downtrend that continued on into the close. NQ is in a down-trending mode on both the daily chart and the 60-minute chart.

NQ was in oversold territory at the close so there may be some pullback in the morning, but as long as pullback does not violate key resistance the downtrend should continue, supports are at 3950 and 3930. NQ may have to break below 3930 swing low before a larger pullback is to be expected.

Key resistance on Wednesday is 3975.

-- Below 3975 is an indication that the downtrend is continuing supports are 3950 and 3930.

-- Breaking back above 3975 implies NQ is in a pullback-up mode with resistance at 4000 then 4025