On Friday, a pause in the collapse of crude oil price helped buoyed the stock market, and although NQ triple-bottom on the daily chart was briefly breached, it did not attract any follow-through sell-off as the price of crude oil stabilized. If fact, NQ rallied back up after a brief early morning breach..
Going forward, as long as crude oil continues to consolidate the stock market should continue to rally, but as soon as the sell-off in crude oil resumes, the stock market sell-off should resume as well.
Another key event to watch for this week is the much anticipated ECB QE announcement. A no-QE announcement could trigger massive sell-off in the stock market. A QE of 500b euro has been factored into the stock market price. Anything less than the 500b could also trigger global stock market sell-off.
Key inflection price level for NQ on Thursday will be 4160.
-- A sustained break above 4160 has the potential to trigger short-covering rally
-- Failure to break above 4160 implies a sideways consolidation or a sell-off. Supports are 4100 and 4080.
