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The Nasdaq faces a key technical challenge today

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The drop yesterday already sees price fall to test its 100-day moving average (red line) and given how futures are pointing downwards by another 1.3% currently, it looks like the open is going to be an ugly one for the Nasdaq.

The added decline at the open will put focus on a key trendline support and if that gives way, we could be seeing the index retrace lower below its 100-day moving average – at least in a more significant and meaningful way – for the first time in the pandemic era.

That could turn this ‘pullback’ into a deeper correction targeting the 25 March low @ 12,786 before getting to the 4-5 March lows @ 12,397 to 12,553. The latter coincides with the 200-day moving average (blue line) currently which is seen just above 12,400.

For dip buyers, it is time to step up and be counted. Otherwise, the tide of selling may see the drop this week turn even uglier in the days ahead.