Last Friday, with major central bankers meeting in Jackson Hole for the weekend it was to be expected that they were going to push the market up to make it looks like everything is fine. It is very easy for them to manipulate the market in the short run, but in the long run market forces rules.
It is very likely that they will continue to support the market this week as the banking problem in Europe is getting worse by the day. The sovereign and bank debt problem is not going away and in fact it is getting worse by the day. Central bankers are now stuck between the rock and a hard place, there is no way out, end game is very near.
Operation Twist, though has not been officially announced yet, is the latest tool the Fed trying out, a rerun of the 1961 Operation Twist (twisting the yield curve) has been launched, designed to push the European banks and countries from the brink of collapse. It should buy them some time, and delay the inevitable collapse, but it will make the eventual collapse even worse.
Operation Twist, though has not been officially announced yet, is the latest tool the Fed trying out, a rerun of the 1961 Operation Twist (twisting the yield curve) has been launched, designed to push the European banks and countries from the brink of collapse. It should buy them some time, and delay the inevitable collapse, but it will make the eventual collapse even worse.
But regardless of what they will do come Monday I will use 2150 on NQ as key Line-in-the-Sand.
- Above 2150 short-covering should continue, with first resistance at 2175-2180, then 2200.
- Below 2150 the shorts can breathe easier, and NQ is likely to go down to supports at 2130, then 2120, 2100 and 2090.
