The imminent Greek's debt default will bring down many European banks who owns their debt, and would also bring down many US banks who insured those debt via Credit Default Swap. Although the default is planned to occur at the end of October many investors may want to bail out of their investment ahead of that official date.
As a consequence, equity markets around the world could come under severe downward pressure. I am sure the Plunge Protection Team would be active in the market, pushing equity market up (while suppressing gold and silver down), but there come a time when even their best effort could get overwhelmed by the tsunami of selling orders as credit contraction intensifies.
For Monday I will use 2200 as my Line-in-the-Sand.
- Bullish above targeting a rally up to 2240-22600.
- Bearish below targeting a decline down to 2150-2160, then 2100
