European Sovereign Debt Crisis ==>> Credit Contraction ==>> Unwinding of dollar carry trade ==>> intensifies credit contraction ==>> has the potential to crash the market, if the Plunge Protection Team gets overwhelmed.
Key level I will be watching for on Monday is 2150.
- Below 2150 the market is in a very strong decline, targeting a move down to 2100. If 2100 level does not hold, we can see a fast move down to 2030-2040 area, or below which implies a crash. A crash is not out of the picture because the situation in Europe is getting worse by by the day.
- Above 2150 implies the market is temporarily out of danger, and is in a pullback-up mode, targeting 2180 then 2200.
