Tests 200 hour MA
The Nasdaq composite index gapped higher on the US employment day on March 9th and made record highs on that day, on Monday and Tuesday of last week. The index moved modestly lower and ended the week down modestly.
Today, the opening gapped lower and in the process is leaving a bearish island reversal at the highs. That occurs when the price gaps higher, then gaps back lower leaving the island in it's wake.
That is not a good picture technically, and the fall lower has intensified as a result today. The index is down -177 points at 7303 currently. That is down -2.4% but it is off the lows.
What may be holding the index up (for now at least), is the 200 hour MA. That MA comes in at 7273.369. The low for the day reached 7285.72. That is not really that close, but when the index is down -177 points, what's another -12 points? So buyers have stalled the fall a little against that key level.
If the market does correct higher, the 100 hour MA (blue line on the hourly chart below) will likely attract sellers. That MA comes in at 7406 - so it too is not really that close. However, the markets are volatile. So it is best to be prepared, and expect sellers on a test.
