With Fitch downgrading France's credit rating, and is now planning to also downgrade Italy and Spain's credit rating, European financial problem is certain to intensify. With the US Federal Reserve not in a position to officially initiate QE3 at this time, the market sell-off should continue, unless the Fed quickly reverse course and officially start QE3.
Is the the Fed's back door QE via dollar SWAP with Europe sufficient to support the currently collapsing market, only time will tell.
Is the the Fed's back door QE via dollar SWAP with Europe sufficient to support the currently collapsing market, only time will tell.
But for Tuesday, I will use 2230 as key inflection point.
- Continue bearish below. with potential decline to supports 2180 or 2140.
- Above 2230 implies pause in the ongoing downtrend, potential move up to 2250 or 2270.
