Following a nearly 5 hour reaction (in the form consolidation), /NQ took another minor leg down & has just hit the secondary uptrend line off the late June lows which aligns with the 11728ish price support/target. With the $NDX down nearly 6%, the odds for a tradeable bounce off this level are favorable before the next major leg down. A likely bounce target zone is the 11940-12010 former first target/support, now resistance zone.
NQ 60m 3 Sept 3rd
However, a “likely” bounce is far from a sure thing. As per yesterday’s video, the $SKEW index, which is used to predict an increased risk of significant market drops (including crashes) is just coming off extreme readings. Bottom line: Stops are a must & while experienced & nimble traders might attempt to game a counter-trend bounce by covering shorts & reversing to a long position (and then back short again), there has been some decent technical damage on the major indexes as well as the tech sector today although this big drop in XLK (tech sector ETF) has taken it down to key uptrend line support on the daily time frame (another reason that I favor a bounce from around current levels).
XLK daily Sept 3rd