Ahead of the FOMC policy announcement due on Wednesday, massive buy programs triggered by the Fed as the market dropped down to test key support, at 4500 price level for NQ, a short-covering rally ensued lasted all day, with the close at the day high.
The buy programs should continue on Wednesday with or without a pullback, and as long as they can hold NQ above 4525 support, the rally should continue, with key resistance at 4560.
With the Chinese stock market bouncing off extreme oversold condition that could last for 3 to 4 days, look for the equity market to rally as well. A clear and sustained break above 4560 should trigger more short-covering, targeting a re-test of the recent high.
The Chinese stock market should continue to crash after the 3 to 4 days dead cat bounce, so far mimicking the 1929 wall street stock market crash
